Government proposes to link amount of Jobseekers Benefit to previous salary

Brendan Burgess

Brendan Burgess

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Higher earners to get larger social welfare payments if they lose jobs under reform plan

Minister to bring memo to Cabinet by Christmas detailing major reforms of welfare system
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Higher earners could receive larger welfare payments if they lose their job under fresh proposals due to go to Cabinet before Christmas.

Minister for Social Protection Heather Humphreys has been given a series of options by officials around how to link welfare payments to previous income, and she now plans to bring a memo outlining the proposed changes by either the end of this month or the start of December.
 
These arrangements actually existed in the past - higher rates of social insurance benefits were payable to higher earners (but up to a rather modest limit) until the early 1980s but they were abolished by one of the FG/Labour coalitions at the time in an effort to protect the value of means tested benefits from cuts. This arrangement is also the norm in many continental European countries.

To my mind it makes sense - it has long bugged me that my dad who worked and paid taxes from the age of 15 to 65 gets only a marginally higher contributory pension than someone who has never worked, or just worked in this country for a short period and gets the non contributory pension.
 
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As far as I recall they do something similar in France.
Unemployment welfare payments are linked to some percentage of previous earnings.
 
ClubMan said:
As far as I recall they do something similar in France.
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The report found that Ireland is one of the few countries in the European Union without a strong link between the level of payment provided to those who have lost their job and the level of earnings in that job, at least for an initial period
 
Brendan Burgess said:
The report found that Ireland is one of the few countries in the European Union without a strong link between the level of payment provided to those who have lost their job and the level of earnings in that job, at least for an initial period
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Ah. Thanks. Delete my posts if off topic.
 
I bet it will never happen, probably by early next year many tech employees will have been let go. The government will get frightened about revenue coming in and the large payments they will have to make under this proposed new scheme. They will also be afraid that those workers might take the opportunity to have 6 months off before looking for a new job. They will put this whole thing on the long finger, they have a huge welfare bill as it is. They need these tech workers back working to pay for it all
 
joe sod said:
I bet it will never happen, probably by early next year many tech employees will have been let go. The government will get frightened about revenue coming in and the large payments they will have to make under this proposed new scheme. They will also be afraid that those workers might take the opportunity to have 6 months off before looking for a new job. They will put this whole thing on the long finger, they have a huge welfare bill as it is. They need these tech workers working to pay for it all
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To my knowledge in every other country were this provision exists payments are capped by duration and % of salary replaced. In any case this is just a proposal, it will take the govt years to legislate for it and implement it.
 
While In supportive, I thnk the payment should be stepped back after 3 years, to the lower basic payment by year 5.
 
Even the USA, hardly a generous welfare state, links unemployment payments to previous earnings.

Typically 50% of former wages for six months, subject to income ceilings.

Germany: 60% single / 67% married of former net wage
 
UK = six months
Irl = up to nine months
DE = 12 months, typically
FR = I think up to 24 months


USA = six months, but extended during recessions, went to 99 weeks back in 2009/2010
 
Not forgetting about employers PRSI a worker on 60,000 will have paid enough PRSI in a single year enough to fund their JSB. A benefit that they need 104 weeks of payments to receive.

It will be hard for the government to justify PRSI hikes when the benefits are so low for many workers - which may be part of the reason for this proposal - though I think mainly it's that someone has realized our JSB compares very badly with other systems.

Since JSB is so low - I've always make sure to have adequate savings to ensure I won't ever be dependent on JSB. Assuming I'm not alone - what that means is for medium to higher earners savings rates are higher than they otherwise would be - which governments don't like.
 
PRSI, Pay Related Social Insurance was just that. When you came to draw Social Insurance benefits, the payments you received were directly related to your earnings, the previous year's earnings IIRC. Employee and Employer continue to pay PRSI at the same levels as when PRSI was introduced, but the benefits side has been reduced to pre-PRSI days when we paid a "stamp". PRSI is now Just Another Tax On Workers and Employers, JATOWE, used to keep civil and public servants and their political masters in the style to which they believe they are entitled (BTW, most of them pay a lot less PRSI then regular workers, based on beneficial rate fixing).
 
Civil and public servants recruited since April 1995 pay full rate PRSI, same as private sector employees.
Those recruited before April 1995 pay a lower rate,but have little or no PRSI entitlements, so won't be impacting the Social Insurance Fund.
 
Mocame said:
To my mind it makes sense - it has long bugged me that my dad who worked and paid taxes from the age of 15 to 65 gets only a marginally higher contributory pension than someone who has never worked, or just worked in this country for a short period and gets the non contributory pension.
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Agreed, it makes sense & is practiced widely across Europe with time boundaries & associated requirements to demonstrate active & constructive job seeking by the applicant. I just don't trust us to not make a bags of it if I'm being blunt.
 
MrEarl said:
While In supportive, I thnk the payment should be stepped back after 3 years, to the lower basic payment by year 5.
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3 years, no way Mr. Earl.
More like a sliding payment scale starting after 6 months coupled with mandatory demonstration of active & constructive job seeking.
Down to basic by end of year 2 in my mind.
 
MrEarl said:
While In supportive, I thnk the payment should be stepped back after 3 years, to the lower basic payment by year 5.
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What would the justification for 3 years be? Is one year not more than enough time to find a new position?

I don't think we want to discourage people from taking up a new position because they have it good on welfare. (Note: I'm not saying that everyone has it good on welfare).
 
Working-age income-based benefit schemes are very expensive to administer as there is so much risk of fraud and error. You need a lot of people checking previous payslips and the like.

Flat-rate schemes have their merits. The PUP was not well targetted but it was implemented extremely quickly and kept a lot of people solvent at a difficult time.
 
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