Worker’ PRSI needs to increase by 2.5 percentage points from now to 2030 to help pay for the ageing population, a think tank has warned.

At the average salary of around €700 a week – or €36,400 a year – PRSI is currently €28.70 a week, but this would rise to €46.20 under the proposal.

Social Justice Ireland (SJI) says the rate will need to increase to cope with the pensions “timebomb”.

In a pre-election briefing, the group, which aims for a sustainable future for everyone, said the State must broaden its tax base and increase overall tax revenue to support its social and economic goals.

It said: “With Ireland’s older population projected to reach 1.9million and a dependency ratio rising to 70.8% by 2057, there will be fewer than two working-age individuals for every dependent.

“A national debate is needed to discuss the desired levels of services, infrastructure, and social supports and how these will be sustainably financed.”

Currently, a PRSI rate of 4.1% applies to everyone’s total income with a minimum payment of €650, but it should rise to 6.6%, according to SJI.

Under its plan, SJI says we should increase PRSI by 2.5 percentage points by 2030 to address anticipated future shortfalls in the social insurance fund, adding that “this can be done” by increasing all PRSI rates by 0.5 percentage points a year for the next five years.

It also says taxes need to rise to repair and modernise the country’s creaking water infrastructure and fund local government.

SJI added: “Suggestions that higher levels of taxation will damage Ireland’s competitiveness relative to other countries is not supported by international studies of competitiveness.

“Ireland’s overall tax take has remained notably below the EU average in recent years.

“Compared to Ireland, almost all other leading competitive economies collect a notably greater proportion of national income in taxation.”