The government’s new Tax and Welfare Commission will study the possibility of moving to a more European-style social insurance model where unemployment benefits are linked to previous PRSI contributions.
Such as Irish Times Reports suggest that this would see those who were in a long-term job entitled to a higher pay than the standard job seeker’s allowance. This will likely be a percentage of their previous salary for a specified period after they lost their job.
This type of arrangement already exists in many European countries and many see the government’s Pandemic Unemployment Payments (PUP) as an attempt to bridge the gap between the current system and the one based on more contributions.
The government plans to start reducing PUP rates on a phased basis from September. As part of this, Tanist Leo Varadkar said the government would consider introducing a new boost that would give people more in the initial phase of unemployment.
The committee, which will hold its first meeting on Friday, is tasked with examining how tax and welfare systems can best support economic activity while meeting the rising cost of public services.
It is due to submit an interim report to Finance Minister Pascal Donohoe in July next year.
The committee will also study the advantages of the site value tax in achieving the objectives of the state’s housing policy.
The current property tax applies only to residential properties, but the site value tax will be drawn on non-residential or commercial buildings, and may be an alternative to the current system of rates paid by businesses.
It can also be used to encourage backward land owners to build or sell their sites similar to the recently introduced vacant site tax.
The previous tax commission, which published its report in 2009, called for the introduction of a local property tax and a carbon tax, both of which have been adopted.
One of the most pressing issues for the government is how to raise enough tax revenue to fund the state in the future, particularly in the context of an aging population and a possible decline in corporate tax revenue.
Mr. Donohue is scheduled to hold a bilateral meeting with US Treasury Secretary Janet Yellen on the sidelines of the weekend meeting of G7 finance ministers in London.