- How do Ireland’s social welfare rates compare to folk north of the Border in Northern Ireland in areas such as unemployment benefit, child allowance etc?
Mr P.B.
Living on welfare is never easy, not least when the cost of life’s basic essentials keeps rising faster than the general rate of inflation – and the annual increase in welfare rates announced in the budget.
The payments available in the Republic are certainly more generous than those available across the Border but then the cost of living down here is also higher.
Unemployment
Unemployment payments have changed recently. In the Republic, we have a new Jobseeker’s Pay-Related Benefit for people who lost their job since March 28th last. Eligibility is based on your PRSI record and there are three separate criteria:
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1 – You must have paid at least 104 stamps at class A, H or P. The first of those covers most private-sector PAYE workers. Class H covers the Defence Forces and Class P fishermen and women
2 – You must have paid at least 26 stamps in the 12 months before you lost your job, and;
3 – You must have paid at least four of those in the 10 weeks before applying for benefit, ie you need to apply within six weeks of losing your job.
If you have between two and five years of PRSI contributions, you can draw down the benefit for 26 weeks (six months). That rises to 39 weeks for those with five or more years of PRSI.
Rates of payment also depend on your PRSI record. If you have more than five years of PRSI, you will get 60 per cent of your gross earnings in your former job up to a maximum weekly payment of €450 for 13 weeks. It then drops to 55 per cent (€375 a week max) for another 13 weeks and 50 per cent (up to €300 a week) for a final 13 weeks.
For those with between two and five years of PRSI, the payment is 50 per cent of gross earnings up to a maximum of €300 a week for the 26 weeks. The minimum payment regardless of earnings is €125 a week.
The older-style Jobseeker’s Benefit – for a maximum six or nine months depending on your PRSI record – is currently paid at a rate of €244 a week to part-time, casual, short-time and seasonal workers, those whose work is based around the school or academic year and retained firefighters. That will rise to €254 next week.
If you do not have enough social insurance payments or your entitlement to benefit has expired and you are still out of work, Jobseeker’s Allowance pays up to the same level as the benefit, though it is subject to a means test. If you are younger than 25, the maximum rate is €153.70 currently, which will rise by €10 next year.
Up North, you can claim what they call “new style” Jobseeker’s Allowance. This is not means tested and, at the moment, is paid at a rate of £92.05 a week (€105.79) if you are 25 or older, or £72.90 (€83.78) a week if you are younger.
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To qualify, you need to have a record of Class 1 national insurance payments over the last two or three years. Even then, the allowance is paid for just 182 days (six months). Thereafter, you may qualify for something called Universal Credit, which is paid monthly at a rate of £400.14 (€459.85) for a single person over 25 and £316.98 if you are younger.
If you are living with a partner, you can get up to £628.10 a month between you as long as one of you is 25 or older, or £497.55 if you are both younger than that.
Universal Credit is means tested. All savings over £6,000 are considered to deliver some income and if you have savings of more than £16,000, you won’t qualify at all. While you can work, you lose 55 pence of universal credit for every £1 you earn after tax and pension contributions.
While we are on the subject of employment, it is worth comparing minimum pay rates in both jurisdictions.
The national minimum wage here will rise next year to €14.15 from €13.50 currently. That’s as long as you are at least 20 years old.
If you are aged 19, you are entitled to 90 per cent of that. That falls to 80 per cent for 18-year-olds and to 70 per cent for people under the age of 18.
In Northern Ireland, if you are 21 or older, you are entitled to what is called the national living wage, which is paid at £12.12 (€14.04).
However, that falls to £10 an hour for those aged between 18 and 20 and to £7.55 for anyone under the age of 18 or first-year apprentices.
Child Benefit
Turning to child benefit, although there was no increase in the budget, it is currently paid at €140 per child per month in the Republic – or €1,680 per year. It is a universal payment, which means it is paid regardless of income.
Next year’s budget is likely to see the addition of a second tier targeting child benefit payment.
North of the Border, the payment is £26.05 a week for the eldest child (£1,354.60/€1,557.57 a year) and £17.25, or £897/€1,031.45 annually, for any other child. So, there’s not a large difference for the first child but the gap widens significantly for anyone with bigger families.
Worse for our northern brethren, they have to contend with something called a high income child benefit charge.
If either spouse/partner earns more than £60,000, they have to file a return and pay back 1 per cent of the child benefit payment for every £200 their income is above that figure. So, if one of them earns more than €80,000, you are paying back all of the child benefit.
However, even though people get little or no child benefit, it can still be worth claiming as the parent also gets a national insurance credit for every week they are claiming child benefit. For parents who are not working while their children are young, it makes sure they do not suffer a gap in their pension record.
Down here, we have a similar arrangement where people can get up to 20 years of social insurance credits for time taken out of the workforce to care for family.
State pension
A bit like here, the UK authorities have been making changes in how they calculate entitlement to the state pension.
If you are currently a man of 75 or older, or a woman of 73, you operate under the old system which pays a basic rate of up to £176.45 depending on your social insurance record and then an additional pension payment based on national insurance record, earnings and whether you contracted out of the scheme during the Thatcher years.
Anyone younger than that will work out their entitlement under what is called the new state pension. A bit like our total contributions approach, you need a minimum of 10 years of national insurance payments or credits to receive any pension and 35 years for a full pension, which is currently paid at £230.25 (€264.61 a week).
Over here, we are moving from the old yearly averaging to the more modern total contributions approach for the State contributory pension, under which you will need 40 years of stamps for a full State pension, with the payment reduced pro rata for those with less service. As with the UK, you need at least 10 years of payments to qualify at all.
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The pension is paid at €289.30 a week, which will rise next year to €299.30. The weekly figures are each €10 higher once you turn 80.
If you do not have enough PRSI payments to get a contributory pension, you can still qualify for a means-tested non-contributory payment of up to €278 a week currently, rising to €288 next year.
So yes, minimum wage aside, the payments are noticeably higher in the Republic and have fewer conditions or restrictions but then, as I said at the outset, the cost of living is also higher south of the Border.
Please send your queries to Dominic Coyle, Q&A, The Irish Times, 24-28 Tara Street Dublin 2, or by email to dominic.coyle@irishtimes.com with a contact phone number. This column is a reader service and is not intended to replace professional advice
