Joan Burton (Dublin West, Labour) | Oireachtas source

This measure was outlined and examined as part of the comprehensive review of expenditure carried out in 2011. Savings arising from this measure are just over €20 million and they will ease the pressure on the social insurance fund, for which there was a deficit of €2 billion last year. This year we expect to have it down to €1.5 billion because people are going back to work. As more people move back into employment next year, we hope the deficit will fall to €700 million. That is still a huge shortfall, and we are committed to maintaining all of the weekly rates of social welfare payments, which we have managed to do.

This amendment will not affect primary rates of payment, rates of payment for dependents or duration of benefit for illness benefit claims. No existing customers of illness benefit will be affected by the measure, but from 6 January 2014 people who are coming into the illness benefit scheme will be affected by it.

It should be noted that there will still be continuity of payment for claimants transferring from jobseeker's benefit or allowance to illness benefit under the revised arrangements. In 2013, the Department will spend €662 million on illness benefit, which is one of the highest rates of payment in all the OECD countries. Many people will say that those figures are perhaps exceptionally high because of arrangements in the public sector which are currently undergoing changes. However, we have very high levels of claims in respect of illness benefit. The cost is €662 million, which is down by €111 million on the 2012 expenditure, partly due to the revised management of sick pay in the public sector, about which the Minister for Public Expenditure and Reform has spoken to Senators. It is an issue that has come up in many European countries due to its cost, and we wish to concentrate the payments in respect of illness and disability on those who need them the most.

Many employees, including those in the public sector, receive their salaries when out sick where their employers have occupational sick pay arrangements in place. The employer then recoups the payment from the social insurance fund, so the employees will not suffer any reduction in income as result of the measure. However, the employer, including public sector employers, will receive less in recoupment from the Department of Social Protection. Where employees are not covered by an occupational sick pay scheme, and they have an income need to cover the short period until illness benefit becomes available, they may have recourse to supplementary welfare allowances and to special needs payments. I wish to be clear about that.

There is no link between this measure and a statutory sick pay scheme which almost all European countries have introduced. There is no additional obligation, as a consequence of this measure, on employers. There is no element of compulsion on employers to pay employees for the duration of the new waiting day period, where they do not have an occupational sick pay arrangement already in place. Social insurance is not restricted to cover in respect of illness, as there is a range of other entitlements for people under social insurance.

This measure will reduce the overall social welfare bill in the Department in respect of illness by over €20 million per year. Much of that is paid in recouping money for employers, but if employers seek to limit their costs on these waiting days, then the management of initial early number of sick days will be with the employer. All of the evidence from people involved in management and ownership of businesses, and the experience from other countries, suggests that the closer sick leave is managed to the place of employment, the better the outcomes for the employer and the employee. One of the problems in social welfare systems is that if people build up fairly continuous sick leave arrangements and gradually begin to leave employment in some cases, the outcome can often be very bad for the individual. Most occupational medical experts will say that when somebody has an illness and later recovers, the best thing is to get back into the world of work if possible. That is very significant in assisting recovery.