On May 23rd, Minister for Social Protection, Joan Burton T.D., reminded employers that they may avail of the Employers (PRSI) Job Incentive Scheme until the end of 2012.
Under the job incentive scheme, if an employer takes on an eligible worker who has been unemployed for 6 months or more, they are exempt from paying employers PRSI for 18 months. The job must be new and additional, be for at least 30 hours a week and last for at least six months.
What is the Job Incentive Scheme?
The job incentive scheme was launched on the 20th June 2010 and whilst it was originally intended that it should cease at the end of 2010 it was extended to the end 2011 in the context of the Budget and National recovery plan.
Subsequently, in February 2012 under the Action Plan for Jobs, the Government agreed to further broaden and extend the job incentive scheme to the end of 2012. The exemption, which previously applied for 12 months, was increased to 18 months for employers who create jobs and employ eligible employees after 1 January 2012.
Under this job incentive scheme, if an employer employs an eligible employee who has been unemployed for 6 months or more, they are exempt from paying employers’ PRSI for 18 months. The job must be new and additional, be for at least 30 hours a week and last for at least six months.
Eligibility criteria for the job incentive scheme has been further broadened and amended to;
- Allow time spent on the JobBridge and the Work Placement Programme count towards the qualifying period for the scheme
- Allow persons on eligible payments undertake short FÁS courses without impacting on their eligibility
- Allow linking periods for illness payments provided the person returns to a qualifying payment immediately prior to commencement of employment.
- Allow time spent in casual employment count towards the qualifying period for the scheme where a person is progressing to a new full time job offered by a different employer
To qualify for the Employer Job (PRSI) Incentive Scheme both the job you create and the person you employ must meet certain criteria. While you are waiting to be approved for the scheme, you should operate the standard employee and employer PRSI payment procedures.
The person you employ must be in receipt of one of the following social welfare payments for a period of at least 6 months (156 days);
- Jobseeker's Benefit
- Jobseeker's Allowance
- One-Parent Family Payment
- Disability Allowance
Time spent on Jobridge or the Work Placement Programme is also reckonable for eligibility purposes. An eligible person may be employed directly from either of these schemes once the required 156 days has been satisfied.
The job must:
- Be a new and additional post/job – employers are not allowed to substitute existing employees to avail of the scheme
- Be for at least 30 hours per week
- Last for at least 6 months. If the employment ends within 6 months of getting the exemption, you may be liable to pay the employer’s PRSI contributions for that employee.
Maximum participation rate
You can only get an exemption from employer’s PRSI for a limited number of employees. This limit is 5% of your existing workforce or, for smaller companies, a maximum of 5 new jobs.
How to apply
If you have a new employee and are eligible for the scheme, you should fill in a PRSI20 form which is available on http://www.welfare.ie/