Plan to slash youth unemployment over next two years

The Government is to commit to slashing youth unemployment with the help of training incentives and subsidies to employers over the next two years.

The pandemic has seen spiralling youth unemployment, and a new strategy will set a target of reducing the current 44 per cent rate to 12.5 per cent by 2023.

The Irish Times also understands that the coalition will on Monday give its strongest signal yet that it will seek to bring in a system of jobseekers’ payments that is linked to a person’s earnings prior to the loss of their job.

Taoiseach Micheál Martin will be joined by Minister for Social Protection Heather Humphreys and other Ministers for the launch of the Pathways to Work Strategy 2021-2025.

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Along with the commitment on reducing youth unemployment the strategy also commits to getting 75,000 long-term unemployed people back to work by the summer of 2023.

The plan includes a €1,000 grant for people on unemployment payments to enter training in short-term accredited courses at a total cost of €11 million per year.

Examples could include construction workers taking classes on driving heavy-goods vehicles or people who sign up for beauty therapy courses with the aim of strengthening CVs.

On the employer side there is to be an extension of the age threshold for recruitment subsidies for those who hire younger workers. Currently the cut-off age is 25, but this is to be increased to 30 in a bid to encourage the hiring of an extra 8,000 workers. The subsides range between €7,500 and €10,000 over a two-year period.

Proposals

There is also expected to be an announcement that Department of Social Protection officials have been asked to draft proposals for how a new "pay-related jobseekers' payment" could be brought in.

When the pandemic unemployment payment (PUP) was introduced the top rate €350 per week figure was decided upon as it was similar to the pay levels of many people losing their jobs in Covid-hit sectors like hospitality.

The Government has announced plans for phased reductions in the PUP to match the rate of jobseekers’ payments as the pandemic recedes.

The first cut happens in September, with those on the €350 per week rate seeing that drop to €300 a week, and those on the €300 rate seeing it reduce to €250 a week.

Department officials are to explore how unemployment payments linked to a person’s previous earnings could be introduced so that people that lose their jobs would not immediately end up with a cliff-edge reduction of income to the current jobseekers’ rate of €203 per week.

Sources said there is currently no target date for when this would happen, with considerations like cost to the State to be taken into account.