Dr. Seán Healy:

I would like to take this. The Deputy asked a very good question. It is a very critical issue in this whole area. The most important thing is that we should have a principle that work should always pay. That should be taken as a guiding principle. We certainly have that. One of the issues is that a full week's work should provide enough for a person to have the minimum to live life with dignity as well. That is where the whole issue of the living wage comes into play. The critical issue is that there has to be a movement of the minimum wage towards the living wage.

The living wage is €12.90. It is not €20 or €25 per hour or anything of that nature; it is €12.90. That is still more than €2 above the minimum wage. There is an issue that has to be dealt with in that context regarding employers who cannot pay the living wage. If there were a decision made to move the minimum wage to the level of the living wage, the vast majority of employers would actually step up to the mark. That would, in effect, create a situation where there would be leeway between both.

The other aspect is that it would be very important to increase the thresholds for medical cards, the fuel allowance, etc. Part of the trouble over the past decade has been that the approach to welfare has been sporadic. I made the point in my introduction that it was benchmarked in 2007. That was a big breakthrough. A benchmark had been chosen, an index had been set and it was delivered. It took a long time to get there, but it got there. That was excellent. The issue then was that the wheels came off the economy a bit with the crash, the bailout and all that. As a result, we have had this kind of situation, as I was illustrating at the start, where the value of the welfare payment now is substantially lower than what it was in 2011.

That is not a good space to be in. The people who are on the lowest welfare payments - the core payments, as it were - are most vulnerable. They find that the value of the payment is less than it was more than a decade ago. I do not think anybody was claiming that they were living in luxury at that time either.

The other point I would make is that it is important to acknowledge that people want to take up employment. We only have to look at the level of unemployment to see that. All of the organisations doing forecasts at the moment, including the Central Bank, which has been mentioned already, and the ESRI, are talking about a very tight labour market going forward. They are saying that we are going to have quite a substantial increase again in jobs in the coming year. We must be careful here that we do not develop a situation where there are two economies, with one that is paying good wages and enables people to access to all sorts of services, etc., and another where people who are on a minimum wage that does not even provide them with the minimum to allow them to live life with dignity. As we discussed already, we need to do what is required in getting the living wage into place and then dealing with issues, such as refundable tax credits and things of that nature, to ensure that people who are in a job can benefit from the full value of what they are entitled to in the first place. Next, we must deal with issues that may be causing problems, such as the thresholds and people basically being afraid to give up their medical card, or whatever, because they earn too much. There is a danger that people will fear that the cost of giving it up will be so high that they will not take that risk. We need an integrated system. We have been arguing for a long time that tax and welfare need to be integrated. Benchmarking and indexing welfare would be a good step in that direction because it would help give predictability. People would know the direction that we were going in and what could be done. That would be a good situation to find ourselves in.