The government last night signed off on a plan to increase PRSI across all classes, and for both employees and employers, measures the government says is necessary to boost funds to pay pensions and retain the state pension age at 66.
The ‘PRSI Roadmap’ proposed and now being implemented by government will see PRSI increasing over 5 years to replenish the Social Insurance Fund. An ageing population and falling fertility rates have led to persistent concerns about the State’s ability to fund pensions in the furture.
A 0.1% rise in PRSI across all classes was already announced for 2024, and the same increase will be applied in 2025.
Then the government plans 0.15% increases in both 2026 and 2027 – and a another 0.2% rise in 2028.
The increases are also necessary, the government argues to fund a new pay related job seekers’ benefit system, so that those with extensive work histories will receive increased benefits if they become unemployed.
A top rate of a maximum of €450, or 60 per cent of prior income, will be paid to for the first three months after redundancy to people who have made at least five years PRSI contributions
That can be followed by a second rate of a maximum of €375, or 55 per cent of prior income to be paid to for the following three months after redundancy.
A third rate of a maximum of €300, or 50 per cent of prior income will then apply for a final three months.
Cabinet also signed off on measures contained in Budget 2024 including the extension of child benefit payments to 18-year-olds in full-time education, and a €12 increase in weekly social welfare payments.
In a significant change to accessing to the state’s contributory pension scheme, those who wish to defer pension until they reach 70 years will be receive an actuarially adjusted higher payment rate.