Pat Breen (Clare, Fine Gael) | Oireachtas source

I am pleased to respond to the motion. As the Minister stated, the living wage is an estimate made by a number of representatives of NGOs and academics who comprise the self-appointed living wage technical group. It is based on research that identifies the income required for the minimum essential standard of living for a single-adult household in Ireland.

It is important that Ireland's statutory national minimum wage and the living wage concept are not conflated or mixed up. The living wage is a voluntary societal initiative that centres on the social, business and economic case for ensuring that whenever it can be afforded, employers pay a rate of pay that provides an income sufficient to meet an individual's basic needs, such as housing, food, clothing, transport and healthcare. It is important to emphasise the affordability element of the concept. As a voluntary initiative, the living wage has no legislative basis and confers no statutory entitlements. The national minimum wage, which has a legislative basis, confers a statutory entitlement on employees and a statutory obligation on employers. The national minimum wage is the legally binding lowest average hourly rate that can be paid by an employer to an employee. The rate is set out and governed by the National Minimum Wage Act 2000, which applies to all employees, including full-time, part-time, temporary and casual employees, with some exceptions.

Since the establishment of the Low Pay Commission, the Government has accepted all of the recommendations it has made in respect of the national minimum wage. Since 2015, the national minimum wage has increased by 13.3%. The most recent figures published by EUROSTAT, which relate to January 2019, show that Ireland has the second highest national minimum wage of any country in the EU at €1,656.20 per month. As the Minister stated, the only country with a higher minimum wage is Luxembourg, where the minimum wage is €2,071 per month. For comparison purposes, EUROSTAT converts countries' hourly or weekly rates into monthly rates. Allowing for purchasing power standards, Ireland drops to sixth place but remains in the group with the highest minimum wage rates in the EU.

It should never be forgotten that the Department of Employment Affairs and Social Protection has a number of in-work supports for low-income families. The working family payment provides support to employees with families with low earnings in accordance with the size of each family. It is currently paid to more than 54,000 families in respect of more than 122,000 children. In budget 2020, the thresholds for the working family payment were increased by €10 for families of one to three children. The back-to-work family dividend is another in-work support. This scheme aims to help families to move from social welfare into employment.

This helps to increase the income of families on low incomes. For example, for a family with two children the working family payment increases after-tax income by over €137 per week and this will increase to over €147 under budget 2020 in January.

Another important in-work support for low-income families delivered by the Department of Employment Affairs and Social Protection is the income disregard on lone parent-related payments. In budget 2020 the income disregards on one-parent family payment and jobseeker's transitional payment increased by €15 to €165 per week.

Social transfers play a crucial role in alleviating poverty and inequality, and reducing the at risk of poverty rate for children from just 40.5% to 18.9% has a poverty reduction effect of 53.3%. Ireland is consistently among the best in the EU reducing poverty through social transfers. We are well above the EU average of 39%.

Again, as part of budget 2020 the Government accepted the recommendations of the Low Pay Commission that the minimum wage be increased by 30 cent to €10.10. As the House knows, the commission made its recommendations on the basis of an ordinary Brexit. The Government has accepted the recommendations of the commission. However, given that the terms of Brexit have not yet been finalised the Government has decided that a decision on the date of implementation will be made on the outcome of the budget negotiations as they become clearer. I hope they will become clearer in the very near future and that the 30 cent recommendation from the low pay commission is implemented.

I respect the commission. In a previous job as a Minister of State, I had responsibility for the Low Pay Commission. It is an independent body which carries out in-depth analysis of the minimum wage and the areas affected by it. I remember during my time it went to the Border region. It is made up of academics and trade union and business representatives. It is an important group which is independent of Government. I commend the Government's amendment to the motion to the House.

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