Ms Anne Vaughan:

The basis of social insurance is solidarity and providing for people when a contingency arises. It is a tripartite arrangement – employers, workers and the State pay into it. It is not always easy to make comparisons with different countries. By and large, though, it would be acknowledged that our employer's rate is low by international standards.

An important point that the commission drew out was the differences in rates, particularly between class A contributions for workers and class S contributions for the self-employed. As I am sure the Chair is aware, there is a large difference, which causes distortions in the market in terms of how people organise their work arrangements. We believe this should be equalised from a labour incentive point of view and from the point of view of the value of social insurance. For example, the social welfare contributory pension, which is approximately €13,000 per annum, is a very valuable payment. Committee members asked about tax arrangements for occupational pensions, but the largest pension element that most people will receive in retirement will be their social welfare pension. Buying it in the open market would be prohibitively expensive for most people. It is in this context that employers, employees and the State make contributions.

Our recommendations were to ensure the sustainability of the fund. We discussed timings, but there were certainly funding issues in the medium to long term. Our proposals go to those.

When discussing social protection, the other piece is the adequacy of the payments. It is fine having an entitlement, but it has to be an entitlement to an adequate payment. If I may, I will highlight our recommendation on benchmarking the adequacy of social welfare payments using a variety of tools and data. We were not prescriptive, but we discussed what is there at the moment and that the previous benchmarking exercise was more than 20 years ago. It is probably something that should be done, not to tie the hands of any Government, but to inform Government decision making in this space.