Higher dole pay for workers who have recently lost jobs

Higher dole payments for workers who suddenly lose their jobs are in the mix for the budget.

A longer-term plan to get early retirees and former carers to take up part-time work is also in the pipeline.

To avoid the so-called ‘income shock’ or ‘cliff-edge’ of going from a full wage to dole payments of €208, newly unemployed workers would get higher unemployment benefit to help them adapt.

The different rates would be based on individual levels of income and how long a person is unemployed. The intention is to tide over workers who will be unemployed for a short period of time before getting another job.

The system is modelled on the PUP (Pandemic Unemployment Benefit) which ran during the Covid-19 lockdowns and restrictions.

At one point, there were five different rates of the PUP, ranging from €350 down to €150 for part-time workers. Different rates of dole are common in other European countries and help workers adjust to their new levels of declining income.

The PUP gave a higher level of dole to workers who lost their jobs due to the pandemic than the normal unemployment benefits. The €350-a-week was viewed as highly significant in maintaining social solidarity during the crisis. At its peak, about 600,000 workers were in receipt of the PUP. The €350 weekly payment was ultimately phased out and rejoined the normal €208 rate for jobseeker’s benefit.

But the PUP has also showed the financial pressures on people who suddenly lose their jobs, particularly workers on low to middle incomes. The experience has prompted a rethink about State supports.

The PUP also showed it is easy to have different rates of payment within the welfare system. However, the payment of different rates of dole to workers depending on how long they are unemployed is controversial.

Officials in the Department of Social Protection are working out the detail of how the proposal will work. A pay-related jobseeker’s payment or basic income guarantee would form the backbone of the proposal for graduated welfare payments.

Social Protection Minister Heather Humphreys then has to bring these proposals to Public Expenditure Minister Michael McGrath in talks on Budget 2023.

“The pandemic has shown you can do the pay-related benefits and people agree on it,” a Government source said.

“With pay-related benefits or ‘staggered dole’ you’d get a higher rate of payment for the first period after you lose your job.”

Meanwhile, the Government is also signalling a wider plan to entice workers back into the labour force. The number of people in employment in Ireland has jumped to more than 2.5 million – the highest on record. The economy is approaching what is viewed as full employment, where the level of unemployment is below 4pc. The seasonally adjusted unemployment rate is currently 4.8pc while long-term unemployment sits at about 80,000.

About 40,000 work permits for staff outside the EU have already been issued this year, with hospitality joining technology and healthcare as sectors with the largest demand. A total of 870 permits for chefs have already been issued.

Early retirees and carers whose children have now grown up are particularly being targeted to come back to work part-time. Estimates show there are hundreds of thousands of working-age people who could come back into the workforce. But a plan would need to combine tax, welfare, health, education and pension entitlements and ensure people would feel it is worth their while, without losing benefits. EU funding is available to roll out upskilling and education programmes.

“You’d need to find that sweet spot. All these sectors are telling you they can’t find more staff. What do you do to entice more people back into the workforce?” a Government source said.

The shortage of workers came up at a meeting with business groups attended by four ministers – Tánaiste Leo Varadkar, Finance Minister Paschal Donohoe, Mr McGrath and junior minister Damien English.

The Small and Medium Enterprise Forum was supposed to discuss lending and access to credit for businesses by banks, but it strayed into labour shortages when it was brought up by Mr McGrath. Work permits have doubled and business representatives were given the clear indication this will not be allowed to continue.

SOURCE: Independent.ie https://www.independent.ie/irish-news/news/higher-dole-pay-for-workers-who-have-recently-lost-jobs-41864360.html