Introduction of a new pay-related unemployment benefit and increased PRSI rates

At a glance

• Ireland to introduce a new Pay-Related Benefit system, which ensures that people with a strong work history receive enhanced jobseeker benefits if they lose their employment.
• Available for people who become fully unemployed on or after the 31 March 2025.

Pay-related Unemployment Benefit

This landmark reform aims to provide higher unemployment benefits linked to prior earnings, cushioning workers from a sudden drop in income if they lose their jobs.

The maximum Jobseeker's Benefit amount is currently only EUR232 per week.

Under the new system, individuals with at least five years of pay-related social insurance (PRSI) contributions will receive:

• 60% of their previous earnings, up to a maximum of EUR450 per week, for the first three months;
• 55% of their previous earnings (up to EUR375 per week) for the next three months; and
• 50% of their previous earnings (up to EUR300 per week) for a further three months.

For people who have between two and five years paid contributions, the rate will be set at 50% of their previous earnings, capped at EUR300 per week, for up to six months.

The new scheme will be available to persons who become fully unemployed after the 31 March 2025. People who lose their job before that date will be remain entitled to the existing Jobseeker’s Benefit.

This new benefit aligns Ireland with other EU countries and is part of broader social welfare reforms.

PRSI Rate Changes

Starting on 1 October 2024, a programme of incremental increases in all classes of PRSI (employer, employee, and self-employed) has been implemented. These increases are required to support the introduction of Pay-Related Unemployment Benefit as well the long-term sustainability of the Social Insurance Fund and the retention of the State Pension Age at 66. The higher rate of Employer PRSI will only apply where weekly earnings are EUR496.  

If you require further information in relation to changes to PRSI rates, please contact a member of DLA Piper’s Irish Employment or Tax team.