At first reading, it looked like all the social welfare reforms detailed this morning were putting money back into people's pockets.
But as so often happens with a press release, the bad news was buried at the bottom.
Admittedly, those getting Child Benefit, various family and carer allowances will be better off.
And the Government is introducing pay-related Jobseekers’ Benefits, so those made redundant are not suffering a huge drop in salary.
But the Social Insurance fund needs topping up and increasing PRSI is how the Government plans to do it.
There’s a certain sense of chickens coming home to roost, as the increase in PRSI rates was flagged in October’s Budget.
Moreover, someone has to pay for the retirement age remaining at 66, argues the Government.
So how will it work?
From October next year, workers and their employers will have to pay an extra 0.1% on their PRSI contributions, followed by the same increase in 2025.
Then for two years, there’ll be a 0.15% hike and a 0.2% rise in 2028.
So, what will a cumulative 0.7% PRSI hike look like for the average worker?
Speaking in the Dáil, Leo Varadkar said the average worker would pay around €45-€50 extra in PRSI in a full year.
After five years, that works out at €315 extra per year for an employee on €45,000 a year, which is the average salary in Ireland.
The Taoiseach said he believed "that was a cost that most workers would be willing to pay".
During Leaders’ Questions, Pearse Doherty didn’t seize on the PRSI hikes, but rather the retirement age, saying Sinn Féin’s policy was to allow everyone to retire at 65.
The party’s finance spokesperson referenced the idea of working on the factory floor, in a hairdresser’s salon or on a building site and the difficulty of working on one’s feet.
Mr Doherty said: "What this Government is telling that brickie, that hairdresser, that waitress is that you don’t have the right to retire at 65."
Mr Varadkar said the retirement age has been 66 in Ireland for the past ten years or so, and that the decision was taken not to raise the retirement age further, but he said: "That comes with a cost."
Government 'getting it all wrong' on PRSI increases - Sinn Féin | Read more: https://t.co/a4ZAUCtzVx pic.twitter.com/WMuCMzr9NN
— RTÉ News (@rtenews) November 22, 2023
This is one of the areas that the new PRSI charges will fund.
Considering Sinn Féin hopes to be in government after the next general election, the fact the party hasn't expressed a plan to unwind the PRSI changes is notable.
Perhaps it’s not so controversial after all?
Fergal O’Brien from employers' body IBEC said it makes sense in terms of offering individual workers better conditions when it comes to redundancy payments.
But the economist said business is being left to foot the bill.
"It’s not just the PRSI changes announced on Wednesday, but also the raising of the minimum wage, the introduction of statutory sick pay and additional leave days."
Mr O’Brien said members have told IBEC that it’s going to create competitiveness problems that could lead to higher costs for consumers, or even businesses failing.
He said the Government "failed to make the hard decision in terms of reform of the retirement age".
"We had a Pension Commission that set out a road map in terms of viability for the social insurance fund, Government didn’t agree with those recommendations so now we’re getting higher costs of doing business because of that."
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Govt 'getting it all wrong' on PRSI increases - Sinn Féin
Doone O’Doherty, an employment tax partner in the workforce tax practice division of PWC, said the measure will naturally impact take home pay for workers but given its gradual nature it shouldn’t have a significant impact.
She pointed out that the cost for the average worker is 90 cent a week from next October, which works out as €46.80 per year.
"It won’t completely negate the benefit of tax cuts in October’s Budget. Workers should still see an increase in 2024, but the longer-term purpose of these increases is to keep pension age at 66 and to roll out pay-related benefits to those made redundant."
It’s estimated it will raise €240m per year, so based on the Department of Social Protection’s own figures, it’s expected to cover those two areas.
Ms O’Doherty explained that the deficit in the Social Insurance Fund has been on the Government’s agenda for so many years, and that it is natural this change is brought in.
But she said: "There never is a good time to do this, and PWC would’ve said that businesses, particularly SMEs, would resist changes to PRSI ... this will absolutely be an additional cost to businesses, as well as employees."
Would another government change the measure, in light of Sinn Féin’s apparent acceptance of the measure during Leaders’ Questions?
Ms O’Doherty said the Opposition often talks about abolishing the USC, but added "when you crunch the numbers, financial reality has to bite".
"Our ageing population is something we’re all acutely aware of and we need to address it," she said, adding that the increase in PRSI does this.
Ireland currently has one working person for every two who have retired. By 2050, that'll be four people 'supported’ by one worker.
She says a change in government won’t change that demographic, so the PRSI change is unlikely to be rowed back by a new government.
