March 31, 2009
A simple idea designed to slow the rate of job losses, reduce the cost of social welfare, boost competitiveness and put more money back into consumer spending!
Starting out with goals like those above you would imagine this would be a far fetched, costly idea.. its not.
Create a scheme for employers to allow them claim back on employers PRSI contributions against the full salary of new employees for 2 years. Limit this to 250,000 per company.
example, a company with 5 staff and a wage bill of approx 200,000 is currently paying 20,000 in employers PRSI. This company could be encouraged to take on an extra employee and offset prsi payments against the new employee, bringing the cost of the additional employee down by 20,000. The employee would not be claiming 10,000 in social welfare payments and more importantly would be contributing through PAYE and VAT on their spending.
There is a risk of abuse by some employers, for example, making an existing employee redundant and then taking on a “free” replacement. Although we can place certain restrictions on which employers are eligible we must accept that there are likely to be some unscrupulous employers who would attempt these tactics. A substantial fine for fraud would be the best form of deterrant and give NERA some work to do.