Workers are set to be hit with five years of PRSI increases.

The Government has signed off on the increases which will see around €46 coming out of the average worker’s pay packet next year.

The first rise will come in next year, with similar hikes each year until 2028.

PRSI will rise 0.1% next October and by the same figure the year after that.

It will then jump by 0.15% in 2026 and 2027, before jumping by 0.2% rise in 2028.

It will mean an increase of around €46 a year in the average worker’s salary from next October.

Social welfare

The Government believes the hikes are needed to pay for a new social welfare system that will see unemployment benefits linked to pay for the first nine months after losing your job.

The new graduated system of payments will see workers who lose their jobs paid 60% of their earnings – up to a maximum of €450 a week – for the first three months.

They will then be paid 55% of their previous earnings – up to a maximum of €375 per week – for the next three months.

The final three months will be paid at 50% of their previous earnings up to a maximum of €600 per week.

After the first nine months, they will only be entitled to regular Jobseeker’s Allowance, which is currently €220 but is rising to €232 in January.

Pensions

The increased money from the PRSI hikes will also help ease the burden on pensions payments.

Newstalk Business Correspondent Joe Lynam said the money is needed because the Government has opted not to raise the pension age above 66-years-old.

“You have to pay for all those extra pensions so it means employers and employees will have to pay more money,” he said.

He said the PRSI increase will also increase the gross cost of employing people for businesses.