Donnchadh Ó Laoghaire (Cork South Central, Sinn Fein) | Oireachtas source

There are two primary elements to the legislation. One relates to the pay-related job seeker's benefit, which we welcome, and the other relates to the PRSI increase, which we are not in favour of, and consequently we will be voting in favour of the legislation. I will deal with them separately. They are connected but I will deal with them one after the other.

We have long called for social insurance-based payments such as jobseeker's benefit to be pay related. It is welcome that the Government has moved on this. The scheme announced by the Minister was not terribly dissimilar to a scheme that was submitted by my predecessor, Deputy Kerrane, with regard to the various consultation processes. One of the flaws of the initial model the Minister brought forward was the difference between the six months and the nine months, and this has been rectified, which I welcome. That is a welcome step in reflecting on that. The Minister's proposal is in line with the intended reforms we would envision for the social welfare system to ensure it is fair for all and that people are protected from poverty. We can all think of examples of people who lost jobs very suddenly during the recession and still had the mortgage to pay, potentially childcare to pay and still had rent to pay. They had big outgoings. Within the family income and the family budget there are very few who have a lot to spare and very few who can afford that kind of cliff edge or that kind of loss in income. There is no question about that.

We want to see the transition of social insurance payments from a flat rate to a percentage of previous earnings to ensure that workers who paid into the system are treated fairly and protected from a sudden push towards poverty. Tá sé i bhfad ó shin in Éirinn. Tá Éire an-difriúil ó thíortha eile sa mhéid nach bhfuil mórán gnéithe den chóras leasa shóisialaigh bunaithe ar phá. Tá cuid mhaith dóibh bunaithe ar na sean-social assistance payments seachas ar an gcóras árachais sóisialta, faoi mar atá i gceist leis an íocaíocht seo. Déanann sé ciall go mbeadh a leithéid ann. Nuair a chailleann daoine a bpoist, tá a gcuid caiteachais díreach mar an gcéanna ach tá titim shuntasach ar a n-ioncam.

In the context of our social insurance payment, our replacement rates do not compare well against many other countries. The rates contrast poorly with other EU countries and particularly where social insurance-based welfare benefits are pay related and designed to secure a worker's normal living standards during periods of employment as well as during sickness, maternity and family leave. In countries such as Belgium, the Netherlands, Austria Denmark and others there is a cap on the maximum weekly payment and the payments reduce the longer the person is out of work. The replacement rate is the amount of in-work income that is replaced by social insurance and other social welfare benefits when a person becomes unemployed, which is the percentage of previous earnings that is covered by social insurance mechanisms such as jobseeker's benefit or illness benefit.

Social insurance payments are critically important in supporting people who find themselves out of work and in need of financial assistance until they can find a new job, recover from an illness, or while caring for a loved one. These protections are in place as a safety net for times of crisis and should provide sufficient support to those who need them. Put simply, rent, mortgage payments, electricity, heating, food bills and much more, will continue whether a person is in work or not. Our social protection system should provide supports to ensure that workers or families do not fall off a financial cliff edge because they lose their job or have to leave their employment through no fault of their own. The current flat rate payment jobseeker's benefit means that the scheme is not responsive enough and does not support workers as much as it should. We know it is possible to have social insurance schemes that are responsive in times of need. We have seen how many people require urgent financial assistance, particularly in the context of the Covid-19 pandemic. The introduction of the pandemic unemployment payment, PUP, emphasised the need for income protection benefits that are designed to support those who face a sharp decline in income as a result of losing their job. It was acknowledged by the Government that it was a good scheme but it was also acknowledged by the Government that flat-rate benefits do not provide adequate income protection for workers when out of work, or at least at the level of income they were at.

Providing people with an income that will allow them to get back on their feet without imposing additional worries or financial stress should be the norm within our social protection system. Commencing with jobseeker's benefit, we proposed linking the rates of PRSI-related social welfare supports to a percentage of previous earnings as is the norm in many other countries. This would ensure that those who are leaving work due to illness, to care for a loved one or through unexpected unemployment do not experience a sudden collapse in income. We would also like to see an approach based on hours rather than days when it comes to calculating jobseeker's benefits for part-time workers. It is also worth looking at schemes of this kind for other areas including for carers and other categories like that.

There is one other point to identify. Some contributions in this House highlighted that the minimum weekly payment is €120.

Some people have made the point that this would be nowhere near adequate and that people on low incomes would therefore be severely disadvantaged. That is largely based on a misunderstanding of what is possible because people on lower incomes will still be entitled to apply for the jobseeker's allowance at the full rate. I am referring to the social assistance payment. However, I am keen to have the Minister reassure me there is no category of people stuck in the middle. I do not expect so but this should be examined and responded to. Fear has been expressed in the House that people might be disadvantaged by the system because they are on a lower income and because the percentage they would be getting would be below what they might expect to earn. My sense is that they would be entitled to the jobseeker's allowance and therefore entitled to the full €230 per week or whatever it is. That would be significantly in excess of €125, but I would like the Minister to clarify the matter. We might need to discuss this further on Committee Stage.

The primary reason we do not support the proposal is our concern over the PRSI increases. In principle, a pay-related jobseeker's benefit system makes absolute sense, but we do not agree, in the context of the current cost-of-living crisis, with increases to employees' PRSI. We have long argued for ensuring the sustainability of the Social Insurance Fund through fair changes to our PRSI system. These calls have been ignored and criticised by Fine Gael and Fianna Fáil over many years. In 2020, the then leader of Fine Gael, Deputy Varadkar, said increases in PRSI would cost jobs; however, Fine Gael performed a U-turn and this legislation has proposed a series of PRSI hikes for the next five years. The Government has decided to increase payroll tax on workers, beginning this year, with no regard for the cost-of-living pressures they are facing. Under these plans, a worker earning €40,000 per year would lose €280 per year in disposable income. Sinn Féin would not increase taxes on low- and middle-income earners' wages, recognising that it would disproportionately affect those who rely on every cent of their pay to cover basic living costs.

We also know that small businesses are facing substantial increased costs, from energy and input costs to labour costs, and that is why Sinn Féin would not increase employers' PRSI for these businesses this year or next to support them as they contend with rising overheads and labour costs. There is a fairer way to ensure the sustainability of the Social Insurance Fund, that is, by not increasing PRSI on workers' wages and by introducing a more progressive system of social contributions from employers. As is widely acknowledged, our rate of employer social contributions is among the lowest in the EU, with the average European rate standing at 20%. While the rate of employer PRSI should not increase this year or next, in recognition of the increased costs faced by so many SMEs, the contribution rate should increase from 2026. However, our PRSI system can and should become more progressive, recognising that some businesses can afford to contribute more towards the Social Insurance Fund and social safety net. That is why Sinn Féin would introduce a higher rate of employer PRSI on the portion of salaries in excess of €100,000.

There are areas within our PRSI system that should be reformed but that the Government has chosen to ignore. While there is an employer PRSI charge for virtually all forms of employment income, share-based remuneration is largely exempt. This is out of line with the practice in many other European and OECD countries, which generally charge employer social insurance contributions on share awards. Approximately €235 million is lost to the Social Insurance Fund as a result of this exemption. That is why we would restrict the employer PRSI exemption for share-based remuneration to our SMEs, raising at least €145 million each year for the fund. Sinn Féin would not increase employee PRSI and would support workers rather than reduce their disposable income. It would not increase employer PRSI in 2024 or 2025, recognising the increased costs small businesses face this year and next. We believe there is scope to increase employer PRSI from 2026 and to introduce a higher rate of employer PRSI for the portion of salaries above €100,000, recognising that some businesses have greater resources than others.

Sinn Féin's approach is fair, supports workers' incomes, and recognises the immediate cost increases that Irish businesses face, ensuring the sustainability of our Social Insurance Fund in the long run. We are very keen to do the latter, and the approach I have outlined would achieve it. Our approach would put our fund on a more sustainable footing than the Government's approach would put it.

The principle behind the pay-related jobseeker's benefit is one we agree with. If the Minister were to remove the PRSI increases for employers in this legislation, we would be in a position to support it, but in its current form we cannot, particularly during the cost-of-living crisis and with increased taxes on workers.

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