PRSI holiday just the job for employers

EMPLOYERS will save millions of euro as the Department of Social Protection is “shortly” planning to implement a PRSI holiday for companies taking on new staff.

The Government was roundly criticised, particularly by opposition parties, for not including the Employer Job (PRSI) Incentive Scheme in last week’s Social Welfare Bill.

Yesterday, confirming the PRSI holiday will go ahead, the Department of Social Protection, which will administer the scheme, said it will support job creation, and counter the drift of people into long-term unemployment and welfare dependency. The scheme exempts employers from liability to pay their share of PRSI contributions – 8.5% or 10.75% of gross pay.

A spokesperson said the scheme will run for the 2010 calendar year only. “However, any qualifying employment created in 2010 will be eligible for the scheme, which will be structured so that employment created prior to the launch can participate for 12 months from the time of launch, and employment created later in the year will participate for 12 months to the corresponding date in 2011,” it said.

That means, for example, that in the case of a qualifying employment created prior to the launch of the scheme, standard employee and employer PRSI will be paid but, following approval for the scheme, the employer will receive a PRSI exemption for 12 months from their date of approval. PRSI rebates won’t apply.

In order to qualify the employment will have to constitute an increase in the employer’s workforce above that applying in the three month period immediately prior to the date of commencement of the additional employee. Another stipulation is that the employee will have to have been on the live-register for six months or more.

Participation will be limited to 5% of the employer’s existing workforce or five posts – whichever is the greater, the department said. “The employer will also be required to declare, when applying, that the employment will be for, on average, 35 hours or more per week. These conditions are designed to prevent displacement from existing full and part-time positions.”

The department would not comment on how much the scheme would cost the Exchequer, though it admitted costs would arise by way of social insurance income foregone.

It also would not comment on how many people would be able to avail of the scheme as it would not be announcing further details until later this month.