Coalition to 'refund' companies for hiring jobless
Published 18/02/2013 | 04:00
A NEW plan to offer businesses a €1 cash refund for every €4 spent hiring someone off the dole will be weighted in favour of the long-term unemployed.
The level of subsidy will depend on how long the worker has been on the dole – with extra incentives for hiring people who have been unemployed for more than two years.
Depending upon the wages of the new staff member, the plan is expected to be worth around €5,000 a year to the employer.
And although the refund will be paid for two years, most of the money will be paid over in the first year, to make it more attractive to employers.
The new 'Jobs Plus' plan is aimed at getting employers to hire the long-term unemployed and will be included in the Coalition's Action Plan for Jobs for 2013.
It will be one of the headline proposals in the plan, known as 'disruptive reforms', which are aimed at changing the way the Government does business.
The scheme will be more lucrative for employers and easier to operate than existing assistance.
The refund continues for two years, as long as the worker is still on the books.
The employer has to commit to take the worker on for a full year at least.
But, cutting through the red tape, the employer doesn't have to prove they are hiring an additional member of staff.
However, there will be safeguards in place to ensure the scheme is not abused.
It is understood the plan will be announced by the Government this week after being cleared by Cabinet.
The refund will equate to 25pc of the gross cost of hiring someone in a job worth about €18,000 to €20,000 a year.
The gross cost would include the basic wage packet, PRSI and USC, where it applies.
Under a tiered system, the refund will be more generous where the worker was unemployed for more than two years.
The plan will replace the existing schemes available for hiring extra workers, such as the Revenue Job Assist and the Employer Job (PRSI) Incentive Scheme.
The Government is aiming to get away from tax relief-based schemes to help with the firm's immediate cashflow.
Jobs Minister Richard Bruton came up with the new proposals after employers complained that existing schemes were too complicated.
The Department of Social Protection came up with a way of administering the scheme simply.
The Action Plan for Jobs 2013 will be approved by Cabinet tomorrow after being put together by a range of department and agencies over recent weeks, including the Department of Jobs, Enterprise and Innovation, the Department of the Taoiseach and Forfas.