The longer someone is out of work, the more their unemployment benefits should be cut, the government’s macro-economic think tank CPB says in a new report.

WW benefit is currently 75% of the person’s last earned salary for two months, followed by up to three years at 70%. There is a maximum ceiling of just under €2,800 gross per month.

The CPB says reducing benefits over time would stimulate people to lower their salary expectations when looking for a new job. This would have a particular impact on older workers who have high salary expectations, the agency says.

Asked by Nos television if there is evidence older people were turning down jobs because of the low pay, an unnamed CPB researcher said: ‘I don’t precisely know but you do see that their wage demands remain high.’

Some 31% of the long-term unemployed are over the age of 55 although they only account for 18% of the working population.

Recession

In total 270,000 people have been out of work for more than a year, and this is a structural problem which predates the recession, the CPB says.

This is because a ‘generous social security system leads to more long-term unemployment’.

To encourage more employers to take on older workers, the CPB suggests introducing wage subsidies which employers can claim. This has been effective in Britain, the CPB says.

It also recommends cutting the perks which older workers get, such as extra holidays.