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Boon for business

Posted June 30th, 2010

By Paddy Kelly

The pay-related social insurance (PRSI) exemption scheme, announced in last December’s budget, is now in place. Employers who take on new workers and were on the live unemployment register for six months or more will get a break for 12 months from paying the PRSI. Taoiseach Brian Cowen, who announced the introduction of the scheme with Minister for Social Protection Éamon Ó Cuív, said it will be back-dated to January 1, 2010 and will cost an estimated €36 million.

There are certain rules that apply to the scheme. The new jobs must be full-time and last for at least six months, so seasonal and part-time work is not included. It is limited to five per cent of the existing work force.

Other than being in receipt of continuous social welfare unemployment payments a person must be on the FÁS Work Placement programme for at least three months or be in receipt of Jobseeker’s Benefit and Allowance, One-Parent Family Payment and Disability Allowance for a period of at least six months.

The Taoiseach said: “It would play a significant role in re-establishing people in the workforce.” Though an estimated €36 million has been mentioned by the Minister as the sum it will cost to finance the scheme, the actual amount will not be known until it is underway. There will also be a saving to the department of Social Protection as the new employee is taken off the unemployment register and payments cease. Minister Ó Cuiv said: “It will be ultimately self-financing.”

Danny McCoy, director-general of Irish Business and Employers Federation (IBEC) welcomed the scheme. He told the Irish Independent that “The new scheme will help to reduce the relatively high cost to employers of recruiting new staff. Getting people back to work in sustainable enterprises is the key to recovery.”

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