Joan Collins (Dublin South Central, Independents 4 Change) | Oireachtas source

I generally agree with the notion of 60%, or whatever, of a person's income because it protects people from a cliff edge, especially if he or she has expenditure responsibilities. However, there are issues with it and I wish to raise some of them. Maybe some of them will dovetail with what has been said. The main problems are it is a two-tier system, the duration of the payment, the maximum payments, decreases for some from current jobseeker's rates and funding.

On the two-tier system, two years of contributions versus five years risks penalising young workers and women, as well as other marginalised groups such as workers with disabilities and migrant workers. There seems to be a marginal difference in the two categories and no need to differentiate.

The duration of the payment has been raised. Lowering existing jobseeker's duration to a flat six months would make it much lower than European counterparts. I think it is 24 months in France and the Netherlands, 18 months in Finland and 12 months in Germany. Crucially, the payment does not return to the pre-2008 crash duration of 15 months.

On the maximum payments, we are not in line with European counterparts at all. In Denmark; it is 90% of prior earnings; in Finland, 84% of average wage; in Luxembourg and Sweden, it is 80%; and in France and the Netherlands, it is up to 75%. The new proposal would be 50% of the basic payment for two years and 60% of enhanced payment for five years, which is well below the comparable European rates.

On the decreases in payment, research by the Irish National Organisation of the Unemployed, INOU, shows certain workers would be worse off under this proposal than the current scheme if they were to become unemployed. This would especially be the case for low-paid or low-hour workers. The INOU stated:

On the income front [it] is particularly concerned for people who work in low paid employment, employment where the hours worked may vary from week to week, leading to an uncertainty of income on a weekly basis. In some cases the person making the claim may well be better off seeking to access an alternative payment, for example Jobseeker’s Allowance or a One Parent Family Payment. However, these payments are means tested, have a range of qualifying conditions and are not automatically open to people who may apply for them.

On the funding, the proposal seeks to fund the new scheme by raising PRSI contributions for both employees and employers. This is in the context of the extremely low rates of employer PRSI contribution we have in Ireland. In France, it is 32% and in Sweden, it is 28%. We have discussed this before with respect to pensions and other issues. In Austria, it is 23% and in the EU peer group, it is 21%. In Belgium it is 21%, in Finland it is 18% and here it is only 9.6%. SIPTU estimates raising employer PRSI contributions from 9.6% to 10% would pay for the entire scheme and still leave Ireland at the bottom of its peer group for employer payroll and social insurance contributions.

I would like the officials' thinking on some of those points. I will summarise the questions. Why is the duration of payment less than many of our European counterparts? Why are we not returning to the pre-2008 payment duration of 15 months or at least SIPTU's recommendation of nine months of payment with three further months of reducing payments? Why is there not a minimum payment floor to ensure people are not left worse off, as per the INOU's research? If the plan is to supplement with further benefit schemes will their be a floor indexed to standards of living? Why is the maximum threshold below European counterparts' statutory sick pay? SIPTU estimates raising employer PRSI contributions from 9.6% to 10% would pay for the entire scheme and still leave Ireland at the bottom of its peer group for employer payroll and social insurance contributions. How would the officials justify recouping costs through rises in both employee and employer PRSI contributions when Ireland's employer social insurance and payroll contributions are less than half the average rate of our EU peer group? Those are some of the thoughts we had in my office in the context of the straw man report.