PRSI reforms will lead to gains for the government but more raises may be required, ESRI says

The Economic and Social Research Institute said that while these moves are progressive, additional measures will be required beyond 2028 to 'ensure the continued viability of the Social Insurance Fund'

The ESRI found the main difference between the Total Contributions Approach (TCA) and its predecessor, the Yearly Average Method (YAM), is that the TCA has led to a large increase in the proportion of women qualifying for the maximum pension rate, from 54% to 75%.

Planned increases to pay-related social insurance tax (PRSI) could lead to government gains of €1.6bn a year by 2028, but further reform will “likely” be required, research has found.

The Government has committed to a set number of reforms in an effort to keep the State pension age from ticking upwards of 66 years and avoid significant future shortfalls in the Social Insurance Fund (SIF), out of which the State Pension is paid.