Move would fund new Pay-Related Unemployment Benefit for all
In its latest Economic Comment, published as an addendum to its Pre-Budget Submission, trade union Unite today (Sunday 21 September) called for Employers’ PRSI to be increased in line with other European countries to fund a range of pay-related benefits for workers. The document proposes the immediate introduction of a new 19.75 per cent Employers’ PRSI rate on salaries topping €100,000 which would fund a Pay-Related Unemployment Benefit for all those losing their jobs.
Pointing out that Irish employers enjoy one of the lowest levels of PRSI in Europe – at less than 8 per cent compared to an average of 21 per cent in the EU 15 – Unite Regional Secretary Jimmy Kelly said PRSI has the potential to fund an enhanced ‘social wage’ in common with other European countries.
“Irish workers have borne the brunt of the recession, in terms of job losses and wage cuts. Now it is time for employers to help fund the recovery by contributing to a social wage. A phased-in increase in Employers’ PRSI could fund a range of pay-related benefits ranging from unemployment and sickness benefit to free healthcare and pay-related state pensions.
“In the first instance, Unite is proposing the immediate introduction of a new 19.75 per cent Employers’ PRSI rate on salaries in excess of €100,000. While this would affect very few companies and amount to just a tiny fraction of turnover, the revenue generated – which we estimate at around €150 million – would fund a new Pay-Related Unemployment Benefit. This would mean that workers losing their jobs would receive 66% of their net wages, up to a cap of, for instance, €36,000, for an extended period. The benefits are clear: not only would workers avoid a sudden collapse in their living standards, but they would also be able to continue spending in the local economy.
“We need to move the debate away from a narrow focus on personal taxation to a wider focus on how we fund social services and income supports so that everyone shares in a working recovery”, Jimmy Kelly concluded.