Dr. Tom McDonnell:

Not all households are the same. Consumption patterns are often very different across households, depending on their age, housing situation, the part of the country they live in and whether they have a disability, etc. Our point is that we want to create an adequacy benchmark. Part of the point in setting up an independent body is to attempt to establish what that adequacy benchmark or threshold would need to be for the different cohorts. This raises a question around how many different groups there are, how finely do you cut it and how broad those groups are. For that reason, we have chosen not to specifically define that it is a certain percentage, or whatever it might be, because it will be different for different groups. Someone experiencing a disability will need to have a higher percentage than someone who does not experience a disability, and so on. That is the answer.

We are also of the view - we anticipate the review will identify this - that various payments are below the adequacy benchmark and therefore, there will have to be a process of getting there. If you are very far away, the question is whether you make the leap in one year or over a three-year period. That is what we described as the first phase - getting to 30% or 40%, or whatever the mark might be. From then on, the wages become effectively benchmarked and you grow along with them, as long as they are real wages because you do not want the standard of living for the people at the very bottom to fall. In those years, it could be based on the price and you go a little bit above and then you come back slightly lower than wages in future years. That would be the type of model we envisage. For that reason, there would be different percentages for different groups - that is what we were talking about.

As for how quick the catch-up would be, certainly you would want to do it within a two- to three-year period, at its slowest. The figure of €296 million that Mr. McGeady talked about is a very small proportion of the average fiscal space in a single year, which is many billions of euro. It is certainly fiscally possible to do it in a single year. Obviously, we are not against that. We do not believe there would be any negative impact on the labour market. If you are moving the minimum wage to a certain percentage, everything else is probably a lower percentage from that again. As they are all linked together, there should not necessarily be any negative labour market impact.