Fine Gael and Labour are both proposing to increase weekly dole payments during the first six months of unemployment as part of welfare reforms.

Fine Gael wants to increase the weekly payment by around €30 for the first three months of unemployment, followed by a smaller top-up amount for the second three months.

However, the proposal, due to be included in the party’s general election manifesto, will only apply to those who have paid sufficient PRSI contributions, and not to the long-term unemployed.

It will be pitched by the party as the first step in creating a tiered system of unemployment benefits for those who have recently lost their jobs, and will provide a basis for further reform.

Jobseeker’s benefit

The proposal will not apply to jobseeker’s allowance, which is not based on PRSI contributions and is a means-tested payment of a maximum of €188 per week. The extra payment will not be linked to previous salary.

In its manifesto, Labour is expected to go further and propose a system of “income protection” for those who have made sufficient PRSI contributions. It would offer anyone who has lost their job “a reasonable proportion of their previous earnings in non-means-tested support for up to six months, capped at a minimum income level”.

A party source said this will “help guard people from a dramatic drop in income”, which “can often trigger a spiral of further problems, like losing a home, relationship breakdown or falling deeper into personal debt”.

Fine Gael sources cast their proposal as an effort to move towards a European-style, tiered system of more generous income protection for a certain period before dropping back to standard rates.

No existing benefits will be cut, but a greater level of payment will be given to those who have worked and paid contributions. It is understood that the self-employed will be treated as a different case.