Humphreys unveils draft proposals to link social welfare to previous earnings

Muireann Duffy

Minister for Social Protection Heather Humphreys has published drafts proposals to introduce a Pay-Related Benefit system, which would link unemployment payments to the person's previous earnings.

Ms Humphreys' department said pay-related benefits "are the norm in EU countries" and such a system will "cushion workers from sudden 'cliff-edge' income shock".

In the case that someone loses their job, pay-related benefits will link their unemployment allowance to what they had been earning prior to becoming unemployed, and will also consider their previous work history.

Under the draft proposals, someone who has been in "insurable employment" (making PRSI contributions) for at least five years - six months of which must have been in the last 12 months - will be entitled to jobseekers allowance worth 60 per cent of the gross income of the job they held prior to becoming unemployed. This amount will be capped at €450 per week.

For those who have been in insurable employment more than two but less than five years - six months of which must have been in the last 12 months - their allowance will be set at 50 per cent of their prior gross income, capped at €300 per week.

The enhanced allowance will be payable for six months, at which point the amount will reduce to the general rate of jobseekers allowance, which is currently €208 per week for people aged 25 and over.

A public consultation on the draft proposals has been launched, with all interested stakeholders, including employees, jobseekers, representative organisations and employers, invited to submit their observations by February 28th, 2023.

Launching the public consultation period on Wednesday, Ms Humphreys said: "Ireland is an outlier in that we are one of the only EU countries that doesn’t have a Pay-Related Benefit system."

"Pay-Related Benefit is designed to protect people who have worked hard all their lives and paid their PRSI. The idea behind it is very simple – it is about softening the blow that workers, who have paid into the system, face when they suddenly lose their job."