Paul McAuliffe (Dublin North West, Fianna Fail)
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84. To ask the Minister for Employment Affairs and Social Protection the progress to date in reforming the jobseeker’s allowance payment to link it to a person’s previous most recent employment; and if she will make a statement on the matter. [24657/23]

Paul McAuliffe (Dublin North West, Fianna Fail)
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I read an interesting report, published last December, on linking jobseeker's allowance to a person's most recent income. I would appreciate it if the Minister would make a statement on the matter.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I thank the Deputy. The programme for Government and the economic recovery plan include commitments to consider a pay-related jobseeker's benefit scheme. This would bring Ireland in line with the majority of other EU member states. The core rationale for the introduction of a pay-related benefit is twofold. First, to recognise and cushion people against the income shock that arises on loss of employment and, second, to provide a tangible return to people who make social insurance contributions.

The need for such a pay-related system became very evident during the Covid emergency leading to the introduction of the pandemic unemployment payment and the employment wage subsidy scheme. I published a straw-man document in December 2022 that sets out the broad parameters of a possible approach to a pay-related jobseeker's benefit scheme. It is not a final design. The objective of the straw-man document is to elicit feedback through a national consultation process to develop a preferred policy design. Written submissions have been received from more than 80 individuals and 32 stakeholder groups. My Department hosted a stakeholder event in Dublin in February, which I addressed. In addition, a series of individual bilateral meetings between Department officials and selected stakeholder organisations has just concluded.

I am very appreciative of the level of engagement with the consultation process by the general public and stakeholder groups. Generally, there is support for the concept of a pay-related benefit for jobseekers, with some concerns and issues raised, as one would expect. Officials in my Department are currently analysing all feedback received through the consultation process. This will inform the design of a proposal, which I intend to bring to Government for consideration in the coming months.

Paul McAuliffe (Dublin North West, Fianna Fail)
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Many people who pay PRSI contributions feel that while they contribute to the overall support of the State and people in need, they themselves may get very little in return. It was always pay related social insurance. The idea of this model is that we reflect the actual reality of the shock that happens when somebody loses their job and his or her income drops very significantly. The Minister is right that the pandemic rate of €350 highlighted, in many ways, the inadequacies of how the current social welfare jobseeker's allowance rate protects people. While acknowledging that we need to pay more to protect people in the short term, there is a bigger discussion to be had on whether we perhaps need to pay more in the longer term as well. I appreciate that is a bigger discussion.

I have some concerns with regard to the overall length of time. The payment would end after six months. That would mean means-tested payments would then kick in after six months rather than nine months, where it currently is.

While we are giving with one hand, we may be taking away with the other. I appreciate the current proposals are not the final details of the scheme.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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As the Deputy will be aware, pay-related benefits are designed to reward people who have worked hard all their lives, paid their PRSI and contributed to the system. Under the current scheme, the basic rate for both jobseeker's allowance and jobseeker's benefit is the same at €220, which means that someone who never worked a day gets the same rate of payment as someone who has worked, for example, for 20 years and has contributed to the system by paying PRSI. The current system does not distinguish between the person who has contributed and the person who has not. That is not fair. Many other European countries have pay-related benefit systems. The pandemic unemployment benefit showed that a pay-related system can work. People received payments based on what their prior earnings were. Technology and the ability to get real time earnings data from Revenue made that possible. Under the draft proposals, people with a long work history would receive 60% of their previous income up to a cap of €450. The reality is that people enter into commitments based on their weekly earnings. If they suddenly lose their jobs, they face a cliff-edge drop in their income. Pay-related benefits are about softening the sudden income shock many workers face at some stage during their lifetimes. I saw it when I worked in a credit union. People who worked all their lives lost their jobs and suddenly could not pay their mortgages. They were in a terrible space. This would cushion that drop in income.