Mr. John Hogan:

I might just give some background on the increase that has recently been approved by Cabinet for PRSI, which covers the period 2024 to 2028, inclusive. It is a means of underpinning the long-term sustainability of the Social Insurance Fund and providing the introduction of a pay-related benefits system for newly unemployed jobseekers. We are seeing that over the coming decades shifting demographics will result in a slower pace of economic expansion and increase expenditure. Ireland will have one of the most rapidly ageing populations in the EU over the coming decades as a result of fewer babies being born and people living longer. Due to this shift in the demographic structure, the number of working-age people for each person in retirement age is projected to fall from around four today to under two by 2060. These are all material considerations we will look at in the context of the PRSI contribution.

Analysis by our Department suggests age-related expenditure will be €7 billion to €8 billion higher by the end of the decade than at the start of the decade, and that the single largest component of age-related costs, and the component that is projected to account for most of this increase, is pensions. This is down, in part, to the decision not to increase the pension age to 68 by 2028. An actuarial review of the Social Insurance Fund has found that, in the base-case scenario, the fund will begin to experience shortfalls beginning in 2034 and that accumulated surpluses will be exhausted by 2043. The Department of Social Protection, which has policy responsibility generally in this area, published a PRSI roadmap on 21 November, following approval from Government.

Under that roadmap, there will be increases in the rate of PRSI from 1 October 2024 for employers, employees and self-employed workers of 0.1% in 2024 and 2025, respectively, 0.15% in 2026 and 2027, respectively, and 0.2% in 2028.