Aengus Ó Snodaigh (Dublin South Central, Sinn Fein) | Oireachtas source

Some months ago the Minister for Social Protection indicated that she intended to introduce statutory sick pay and that she was considering making employers pay the first four weeks of illness benefit which is currently paid from the PRSI fund, and Exchequer transfers when that fund is low, as it is currently. The PRSI fund and its associate schemes are like one big community-rated insurance policy which protects both employers and workers when they fall on hard times. The references that were made to the introduction of statutory sick pay made it sound like a positive development but in reality what is proposed is essentially a cut of €89 million in the illness benefit scheme into which employers and employees pay. Employers and workers have a reasonable expectation that the Social Insurance Fund into which they pay will also pay out when needed. This particular proposal, or more correctly, cut, which passes on an €89 million burden to employers, with no regard to their ability to pay, will result in some employers being forced to close their businesses. It will also lead to redundancies and wage cuts. Sick workers will see their pay packets reduced. One of the worst elements of this proposal is that it may lead to discrimination against those with disabilities or recurring illnesses.

I caution the Minister against proceeding with her proposal, especially since there are alternatives, and I will come to my party's alternatives later. The Government has proposed cutting illness benefit because there is not enough money in the PRSI fund, which we accept as true. However, to some extent, that problem is not just the fault of Fianna Fáil, as some have tried to claim here, but is also of the current Government's making, when it cut the amount that employers had to pay into the fund from what was already a very low base by international standards. From 1 July 2011, the lower rate of employer PRSI was halved to 4.25% for all jobs that pay up to €356 per week. The rate is due to be restored to 8.5% from 1 January 2014. Far from stemming job losses, as was claimed at the time, some 33,000 additional jobs have been lost in that period. The lower rate of PRSI also incentivised unscrupulous employers to cut wages and reduce workers' hours. We warned the Government and the Minister for Social Protection at the time that the cut would make the deficit in the PRSI fund even worse but they chose not to listen.

This Government has already cut the redundancy rebate. Now it is proposing to cut the illness benefit scheme. What is next? Will the maternity benefit scheme be next? What is the next cut to workers' protection that the Minister will propose? The Government's proposals will possibly force small employers to close down their businesses. If one takes the example of a garage with one employee who keeps the garage open, if that person is on sick leave, the employer not only has to provide illness benefit, but also has to pay another person to keep the garage open and keep the business going. Small operations potentially could be wiped out by such additional costs and jobs could be lost.

Sick workers will suffer because many employers will abandon their more generous sick pay arrangements and offer only the statutory minimum. One of the employers' organisations has suggested that up to 60% of employers include some type of sick pay provision, over and above the illness benefit, in contracts of employment. That extra element will be the first thing to go. We must not forget that a householder's outgoings do not reduce just because he or she is sick. In fact, in most cases, they increase and the maximum rate of illness benefit, at €188 per week, is well below what most people would earn.

The move would prompt an increase in discrimination against people with disabilities and those who suffer ill health. When employers are hiring people, they look at the potential future cost of employees. This is a small country and potential employers could know, for example, that candidate X suffered from cancer or candidate Y has had a relapse of a serious illness. That could become a disincentive to employing that person and cause him or her to suffer discrimination. While there are laws to protect workers against discrimination, it is very difficult to prove and very hard to win such a case. All that will happen is a further clogging up of the industrial relations mechanisms. The Minister can prevent that by not proceeding with her proposal.

The motion before us rightly calls on the Government not to proceed with the proposal but it does not offer an alternative. To be credible in opposition, one cannot just say "No" to everything. One must put forward realistic alternatives. Hopefully, I have done so with the proposals I have put forward today. Sinn Féin is opposed to the cut to the illness benefit scheme and will vote against it. The Minister's proposal to hike employers' costs in an indiscriminate way, without heed to ability to pay, could not come at a worse time. It will undoubtedly cost jobs and cause hardship. If the Minister really believes that employers should be contributing more in terms of illness support for workers, she should raise money from those employers who can afford it, with PRSI contributions set at rates that are progressive and reflective of ability to pay. My party suggests that the Minister raise the employer's PRSI contribution made on pay exceeding €100,000 to 15.75%, which would raise €91.5 million, a figure very close to the Minister's-----

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