Government to pay employers in bid to cut dole queues
Published 30/11/2012 | 05:00
EMPLOYERS will be paid €1 in every €5 of the cost of hiring someone off the dole queue in a new Government jobs deal.
The plan is aimed at getting the long-term unemployed – those out of work for 12 months or more – back into the workforce.
Jobs Minister Richard Bruton has come up with the new proposals after employers complained existing schemes were too complicated.
The new plan will be more lucrative for employers and easier to operate.
It's expected to be worth around €5,000 a year to the employer, depending on the wages of the new staff member.
The payment will continue for two years, as long as the staff member is still on the books and there is no commitment on the amount of time they have to be employed for.
Finance Minister Michael Noonan is weighing up whether to do it by a straight cash grant or a PRSI refund.
The Government is anxious to get away from a tax-relief-based scheme to help with the firm's immediate cashflow.
Cutting through the red tape, the employer also won't have to prove they are hiring an additional member of staff. However, there will be safeguards in place to ensure it's not abused.
Hiring a worker on a salary of €25,000, with a PRSI bill of another €2,500, the Government would give back €5,000 to the employer.
Labelled the "+One" plan, it will form a key part of Mr Noonan's Budget 2013 proposals to boost employment.
The number of long-term unemployed – those over a year on the dole queue – has been rising steadily over recent years.
Mr Bruton has been working on the plan with senior officials from a range of department and agencies over recent weeks, including Forfas, the Department of Jobs, Enterprise and Innovation, Department of Finance, Department of Social Protection, Revenue Commissioners, Department of Taoiseach and Department of Public Expenditure.
The idea arose from comments from business owners at meetings around the country.
The options being weighed up by Mr Noonan are a double PRSI allowance, which would reduce employment costs by one-fifth.
The rate of PRSI paid by employers at 10.75pc, would be doubled, and then deducted from the company's PRSI bill every month.
Alternatively, a cash payment would be made by the Government to the employer every month, equating to a similar amount.
The PRSI scheme would be easy to administer because there is a system already in place, while the grant is a direct payment so would be tempting to employers.
Whichever route is chosen, the scheme is supposed to be easy to understand, so it will catch the eye of employers.
At the moment, there are a number of schemes available for hiring extra workers, such as the Revenue Job Assist and the Employer Job (PRSI) Incentive Scheme.