Pay-related welfare benefits won't create two-tier system, claims Humphreys

Under Social Protection Minister Heather Humphreys' proposed plan, those who lose their jobs would earn almost twice the current rate if their previous earnings or PRSI contributions reached a certain level

Heather Humphreys rejected the idea put forward that such changes amount to a two-tier social protection system. Picture: PA

The Social Protection Minister has rejected the idea that paying high-income earners more in jobseekers' allowance would create a two-tier system.

Heather Humphreys was speaking as she prepares to bring a plan to Cabinet on Wednesday which would radically overhaul how payments are made to people who earn more should they lose their jobs.

Under Ms Humphreys' proposed plan, those who lose their jobs would earn almost twice the current rate if their previous earnings or PRSI contributions reached a certain level. 

Under the proposal, any worker with five or more years of PRSI contributions would be entitled to 60% of their gross weekly salary, but this would be capped at €450 per week and would likely taper off over time.

Speaking in Drimnagh in Dublin on Monday, Ms Humphreys said the proposal would see public and sectoral input on the proposed changes. However, she rejected the idea put forward that such changes amount to a two-tier social protection system.

Ms Humphreys said the scheme to introduce pay-related welfare benefits would be brought forward in the coming weeks, to avoid a "cliff-edge" for people who lose their jobs.

Pay-related benefit is in the Programme for Government and I'm committed to making it that your benefit is linked to what you've put in. A lot of people pay into the social insurance fund and then when they become unemployed they face a sudden cliff edge in their incomes. And I want to ease that for them."

Ms Humphreys will bring a "strawman proposal" on Wednesday to set out what a new pay-related social protection system would look like.

This proposal would then go to a consultation period with trade unions and employers' groups and would be reviewed late next year.

It would involve linking social welfare payments to people’s past working history, where a person could sustain, in the early phase of a period of unemployment, an income somewhat close to what their employer paid.

Housing Minister Darragh O'Brien, speaking on RTÉ radio, said he believed in a republic " all citizens should be treated equally". 

He said he did not believe the social protection system should take into account individual circumstances or backgrounds.

"I've seen no detail [of the plan] either formally or informally. But to be honest, I think our welfare system is broadly fair. It helps people who need help and doesn't distinguish between backgrounds and circumstances.

In a republic that we live in, every citizen is equal — and should be — and the welfare system is there to support people when they need the assistance of the State. I think any fair assessment, people would look back and say it's fair. 

"When you compare it to the UK or the rest of the EU, the payments compare favourably to other jurisdictions and, in the main, it works."

Mr O'Brien said any improvement in the system should focus on "improving efficiencies".

Asked if she believed the measure could pass any reluctance from Fianna Fáil, Ms Humphreys said it could and pointed to the fact that the plan is in the Programme For Government.

"I believe that when someone has worked all their life, have contributed to the social insurance fund, that when they are suddenly unemployed, we can ease that burden."

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Ms Humphreys said she would "hear all proposals" on the issue but said the "principle" of being paid more based on previous earnings was one which she was committed to.