Workers who lose jobs to receive up to €450 a week, depending on previous salary

Workers with a history of employment will qualify for welfare rates of up to €450 under the plans.

Social Protection Minister Heather Humphreys will bring a memo to Cabinet tomorrow setting out plans to introduce unemployment benefit payments that will be directly linked to a worker’s pays before they became unemployed.

Under the major shake-up of the welfare system, a worker with five or more years of PRSI contributions will be entitled to 60pc of their gross weekly salary capped at €450 per week.

A worker with between two and five years’ worth of PRSI contributions will be entitled to 50pc of their gross weekly salary or up to €300 per week.

An employee will need to have made PRSI contributions in six of the 12 months before they became unemployed to avail of the higher rates of jobseeker payments.

Those with less than two years of PRSI contributions will receive the current rate of €208 per week. However, this is set to rise to €220 a week in January following a major increase in welfare rates in September’s Budget.

Under the plan, the higher rates would be paid for only six months before being tapered off to the regular jobseeker payment rate.

A Government source said: “This is about supporting workers. This is all about ensuring people who have worked for a long period do not suffer a cliff-edge drop in their income. PRSI should be what it says on the tin – Pay-Related Social Insurance.

“The amount you pay in is related to the amount you earn so it’s only fair that the amount you get back is treated in the same way,” the source added.

The pay-related benefits approach is aimed at ensuring workers who have made financial commitments based on their salaries are not faced with significant amounts of debts if they lose their jobs.

Minister Humphreys is very supportive of the proposal she is bringing to Cabinet but will put the idea out to public consultation and get the views of employees and employers before drafting legislation.

Ms Humphreys has earmarked the scheme as one of her key policy objectives since she was appointed Social Protection Minister.

The Covid-19 pandemic laid the groundwork for pay-related unemployment benefits system with the Government introducing five different rates of the Pandemic Unemployment Payment (PUP) for workers who lost their jobs due to social distancing restrictions.

Similar schemes are currently in operation in Germany and Estonia where workers receive graded welfare payments based on their salaries.

Speaking in Cavan last Friday, Ms Humphreys said it was her intention to introduce the new pay-related welfare system before the next general election.

“It’s something that I’m very committed to, because we don’t want to see people when they’ve been working all their lives suddenly get the bad news they’re going to lose their jobs and then there’s a huge cliff-edge drop in their income,” she said.