Ms Jackie Harrington:

I am the principal officer with responsibility for jobseekers policy in the Department I am joined by Brian Duff, who is the principal officer with responsibility for PRSI policy, Karen Byrne, on my left, and Colin O’Neill, to my far right, who are assistant principals in these areas. I thank the committee for the opportunity to attend today.

On the background to pay-related benefit for jobseekers, the Department presented to the committee on this new scheme last April as part of an extensive consultation process undertaken on this proposal. This included the publication of a strawman paper in December 2022 and a series of meetings with stakeholders. The proposal had a strong public response, following which we received more than 110 submissions, which included very constructive feedback. The responses were overwhelmingly positive to the principle of linking benefit payment to previous earnings when a person becomes unemployed. It was also acknowledged that the measure will bring Ireland in line with our EU counterparts.

One of the key issues identified was the duration of the payment, which, at that time, was proposed to be a maximum of six months. This issue was also raised in the discussion with the committee, as was a proposal to taper the payment and to review the proposed minimum payment. These proposals have been taken on board and are reflected in the general scheme, as approved by Government earlier this month.

The general scheme provides that the benefit will be payable for nine months for those with more than five years of employment, in line with jobseeker’s benefit. Tapering of the nine-month payment is also included at three-monthly intervals, which will minimise the cliff-edge effect as benefit expires. The minimum rate of payment has increased to €125 per week, which is higher than the minimum under jobseeker’s benefit. The weekly rate of payment for people who have at least five years of paid PRSI contributions will be set at 60% of previous gross earnings, subject to a maximum of €450 for the first three months. After that, the rate will reduce to 55% of earnings, subject to a maximum of €375 for the following three months. The final three months will be paid at the rate of 50%, up to a maximum of a €300 payment. For persons who have between two and five years of paid contributions, the rate will be set at 50% of previous gross earnings, subject to a maximum of €300 per week for up to six months. The Department has commenced work on the necessary arrangements to introduce this scheme towards the end of this year, for which Government provided €5 million as part of budget 2024.

The Bill will also provide for the range of PRSI increases agreed by Government in the context of the actuarial review of the Social Insurance Fund and the Commission on Pensions.

As well as covering the cost of the pay-related benefit, these gradual and incremental increases will support the sustainability of pensions, including the retention of the State pension age at 66 years. All classes of PRSI will increase by 0.1% from October 2024, and by a further 0.1%, 0.15%, 0.15% and 0.2% in 2025, 2026, 2027 and 2028, respectively. This means a total increase in PRSI rates of 0.7 percentage points over the next five years. These increases are in line with that proposed by the Commission on Pensions and with the analysis presented in the actuarial review of the Social Insurance Fund with some additional headroom to cover the pay-related benefit, the full-year cost of which is estimated at €130 million. An increase of 0.1% works out at approximately 90 cent per week for a person on average wages and the same for the employer. The annual minimum contribution payment for self-employed class S contributors and the voluntary contribution for former class S contributors will both increase by €150 from €500 to €650 from 1 October 2024.

I will briefly outline the main provisions of the heads, which we forwarded to the joint committee and which will amend the Social Welfare Consolidation Act 2005, and which I will refer to as the Act. Heads 1 to 4, inclusive, provide for the PRSI increases as agreed by the Government. Heads 5 to 15, inclusive, cover the pay-related benefits scheme and are modelled on the lines of existing legislation for benefit schemes. They cover key conditions of entitlement relating to the requirement to be fully unemployed, capable of and available for work and to be genuinely seeking work. The concept of the governing contribution year, which is two years prior to the year of the claim and which applied to jobseeker's benefit, will not apply to this benefit. Instead, a person will be required to demonstrate a strong and more recent attachment to the work force. Head 16 provides for the closure of the jobseeker's benefit scheme to new applications, as the new pay-related benefit is introduced. To conclude, we look forward to hearing the committee's views on the heads of the Bill and we are happy to assist with whatever questions members may have this morning.