Denis Naughten (Roscommon-Galway, Independent) | Oireachtas source

A related question to this is the income banding threshold for the various rates of payment. When was the last time they were increased? Has the Department looked at increasing these bandings, either line with the average industrial wage or in line with the minimum wage? What impact would this have on the bandings? I know the rates of payment are different but I am asking about the banding. Effectively through the straw man in a roundabout way are we modernising something that should have logically been updated on an annual basis, based on the average industrial wage or increases in minimum wage, rather than leaving it at an historic level?

If a Minister came in to me and said they wanted to introduce pay-related benefit, PRB tomorrow, I would say that the only quick and dirty version I could do them would be if we just changed the bands and left jobseeker's benefit as it is. Off the top of my head, I do not know – I do not know if colleagues here know – when the bands were last changed but the non-changing of the bands is probably to the advantage of the customer in that the highest rate is payable once someone is over €300. Once you move that band up, some people fall back in the pay rate. Not pegging them is probably a factor in how we have ended up with 85% of jobseeker's benefit recipients being on the top rate. The people below them probably had the band moved. There is a question though. Indexation is a core debate in the social welfare system. At the moment, it is being looked at in the context of pensions. We do not have a system of indexation in Ireland. It is done budget-by-budget where rates are reset. In a pay-related system, to some extent for those who are under the cap indexation is automatic because as their wages go up, they get 60% of a higher rate. Then the question of indexation is really indexation of the caps. Obviously jobseeker's benefit is banded at the moment; the pandemic unemployment payment, PUP, was banded; and there is reference in the strawman proposals as to why we have not put in a banded approach this time. One of the reasons is that one tends to get distortions within a band. For people at either extreme of it, one can get very different replacement rates and there are also threshold effects. For that reason, we thought it was better just to have a cap and then a straight percentage but we are obviously open to different views on that.