Mr. Neil McDonnell:

We understand the desire of the Department and the members to extend to workers the availability of a statutory sick pay scheme. The then Department of Employment Affairs and Social Protection paid out €13.64 million in illness benefit to 49,000 people in 2019, an average of €276 per person. However, we note the equivalent in the public service on the basis of a 4.2% sickness rate in 2019 cost €381 million. Any system of statutory sick pay that relaxes the rules currently applied to illness benefit would result in a far higher cost for statutory sick pay. Presumably, it is the intention of the House that employers bear this cost. Sick pay is a material cost for many small businesses, especially those that have to hire temporary replacement labour.

There are public comparisons being made in this consultation to rates of sickness benefit being paid in other EU countries where social contribution rates are far higher. If we want higher personal benefits, we must be willing to pay for them via employee PRSI. We also acknowledge that our social insurance system is not social insurance in the terms meant by our EU neighbours. Employer and employee contributions, which used to be capped, are no longer. However, benefits are capped. This is not how true social insurance systems function. This is how tax systems function.

Workers earning less than €18,304 make no contribution to the Social Insurance Fund. They make a payment of €185.90 as a universal social charge, USC, which some people wish to get rid of. Many part-time workers fall into this category. We think it is valid to ask workers who want to avail of social security benefits to make a small contribution to them. This means we must socialise those costs elsewhere. If we are going to have a conversation about social insurance entitlements, we need to have an adult conversation about how we fund them. Putting the burden on employers will simply increase the cost of labour with knock-on implications for annual incomes.

We spend €3.5 billion annually on the pay as you earn, PAYE, tax credit. Should we revise this? While Ireland is already heavily and overly dependent on income tax, Irish Small and Medium Employers, ISME, has previously proposed, and does so again this morning, a solidarity tax of 3% on all PAYE incomes over €100,000. This would bring PAYE workers in line with high earning self-employed persons, and it would generate €314 million per annum. Whatever way we choose to fund statutory sick pay, let us not make it a burden on employers, and let us not borrow more money to fund it.