Under the new Pay-Related Jobseeker’s Benefit, workers with a strong attachment to the labour market and a long record of paying PRSI contributions will receive 60% of their previous gross weekly wage up to a maximum €450 a week, almost double the current rate.

This will reduce to 55% capped at €375 a week for months 4, 5 and 6; and to 50% capped at €300 for months 7, 8 and 9. If the worker is still unemployed after nine months they can transfer over to the means-tested payment for the long-term unemployed, Jobseeker’s Assistance (€232).

An unemployed worker who has worked and paid PRSI for between two and five years will receive 50% of their previous gross weekly wage up to a maximum of €300 for the first six months of unemployment.

If the worker is still unemployed after six months they can transfer over to the means-tested payment for the long-term unemployed, Jobseeker’s Assistance (€232).

Owen Reidy said: “This is a very important start. We have been campaigning for this for some time, with the support of Siptu and Unite. In a land with 2.7 million people at work, a nation effectively at full employment, we’re really talking about a very small number of people who will avail of this support.

“We must acknowledge Government for taking this progressive step. The financial fallout for families and the local economy was brought into sharp focus this time last year when the 650-strong workforce in Tara Mines were laid off.

“When someone on, say, €40,000 or €50,000 is suddenly laid off, their mortgage and other bills don’t stop. They have an immediate need for this benefit. This support is taken for granted by people in mainland Europe. For us, this is a welcome step in the right direction for Ireland.” 

 Ireland is one of only four EU27 member states, along with Greece, Malta and Poland, to pay the same flat-rate payment to unemployed workers (€232 a week), despite workers paying pay-related social insurance (PRSI) contributions when in employment.

ICTU members see the new benefit as the beginning of a shift toward a more European-style social insurance system. They also want pay-related family leave to be included in the next Programme for Government.

The 60% that newly unemployed PRSI-contributing workers in Ireland will soon be able to access will still compare poorly with pay-related unemployment benefits in Belgium, replacing 91% of a worker’s previous wage, with the 79% available in Denmark and 69% in the Netherlands.

Nonetheless, Owen Reidy said that ICTU members welcome the progress as a welcome advance for PRSI-contributing workers in Ireland.

“Across the rest of the EU, contributory social welfare benefits are pay-related — the weekly payment is a percentage of a worker’s previous wage — to allow workers continue to pay their mortgage and other bills so as to secure their normal living standards in the short-term while looking for a new job.”

 In Ireland, the average time people spend on contributory Jobseeker’s Benefit is 13 weeks, with 70% of workers in a new job within six months of signing on.

“When we began this campaign, some said the measure would encourage some people to stay off work longer term,” said Mr Reidy. “The truth is that people want to get back to work quickly — for financial reasons, but also for their wellbeing. That became very clear during Covid.

“This is also an important measure in terms of making Ireland an attractive place to work when companies are trying to recruit skilled people into the country.” 

 Meanwhile, the Government intends for this new payment and keeping the qualifying age for the State pension at 66 to be cost neutral, with all costs being recouped via a 0.7% increase in employee, employer and self-employed PRSI contribution rates phased in over five years.

The newly passed legislation will see a worker on the average wage pay .90c more a week in PRSI when the first 0.1% of the new payment increase kicks in from October 1st.

Owen Reidy said: “Unions recognise that social spending must be sustainable. However, the estimated €62 million yield from the 0.1% increase in PRSI contributions this year will be all but wiped out by the decision to simultaneously increase the cut-off point at which employers must pay a full PRSI contribution on behalf of their employees.

“Government must publish the options paper on which they based their decision on the application of the lower rate of employer PRSI contribution. The lack of transparency risks doing untold damage to support for their PRSI roadmap to a sustainable social welfare system.”