Workers are set for an incremental increase in their PRSI over the next couple of years.
The government will be rolling out PRSI increases over the next five years, which will see the average employee pay an extra €46 a year from next October alone.
Ministers have agreed to the tax changes which will begin with two 0.1% increases, first next October and then again in 2025. PRSI will jump by a further 0.15% in 2026 and 2027 followed by a 0.2% increase in 2028.
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This roadmap was brought to Cabinet yesterday.
It is understood that the first 0.1% increase will work out at an extra 90c a week for the average worker, meaning an extra €46.80 a year from next October. The overall increase is expected to raise an additional €240m in a full year.
The PRSI changes will also apply to both employers and people who are self-employed.
These increases are being made as a way of ensuring that the pension age could be kept at 66 and to allow for the rollout of pay-related benefits for people who are made redundant.
These pay relayed benefits mean that people could be paid over double the current weekly Jobseeker's Allowance rate.
As part of the three-stage process, unemployed workers will initially be paid 60% of their previous earnings, or up to €450 per week for up to three months after they lose their job. It was originally proposed that this payment would last for six months. However, following high-level government talks, it has been decided to reduce the term for the top payment to three months and gradually taper the enhanced state benefits over nine months.
After the first three-month period, the payment will reduce to 55% of earnings, or up to €375 per week, and this will last for a further three months.
If a person still has not found employment, they will get 50% of their earnings up to €300 for a final three months.
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