John Paul Phelan (Carlow-Kilkenny, Fine Gael) | Oireachtas source

I thank the Senator for raising this matter. The national minimum wage is the legally binding, lowest average hourly rate that can be paid by an employer to an employee. This rate is set 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.

The National Minimum Wage (Low Pay Commission) Act 2015 established the Low Pay Commission, which makes recommendations each year regarding the national minimum wage to the Minister for Employment Affairs and Social Protection. Since the establishment of the commission, the Government has accepted all the recommendations it has made for the national minimum wage. Since 2015, therefore, the national minimum wage has increased by 13.3%. The most recent figures published by EUROSTAT for January 2019 show that Ireland has the second highest national minimum wage of any country in the EU at €1,656.2 cent per month, behind only Luxembourg whose minimum wage is €2,071 per month. Allowing for technical adjustments to reflect purchasing power standards, Ireland drops to sixth place, but still remains in the group with the highest minimum wage rates in the EU.

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 for employees with families who have low earnings in relation to their family size. It is currently paid to more than 54,000 families in respect of more then 122,000 children. In the Budget Statement 2020, the thresholds for the working family payment were increased by €10 for one to three-child families. 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 incomes of families on low incomes. For example, for a two-child family, the working family payment increases after tax income by more than €137 per week, and this will increase to €147 per week under budget 2020 in January 2020. Another important in-work support for low income families delivered by the Department of Employment Affairs and Social Protection is the income disregard on the 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.

It is important to highlight that the 2019 Low Pay Commission report was considered by Government on 7 October 2019. The commission recommended an increase in the national minimum wage of 30 cent to €10.10 an hour on the assumption of an orderly Brexit. The commission made its recommendations on the basis of an orderly Brexit. Since the commission made its recommendation, the political and economic climate surrounding Brexit has changed. The likelihood of a disorderly Brexit is present and, therefore, the economic circumstances have altered and will continue to be uncertain until we get clarity on that matter. In developing its recommendation on the national minimum wage, the commission assesses various economic indicators such as changes in earnings, exchange rates, employment, unemployment, productivity, international minimum wage comparisons, the need for job creation and the likely impact of the national minimum wage changes on levels of employment, cost of living, and national competitiveness. Various economic commentators, both in Ireland and overseas, have highlighted that any form of Brexit has the potential to impact negatively on the economy. This is the controversial line. The Government has accepted the recommendations of the commission; however, given that the terms of Brexit are yet to be finalised, the Government has decided that a decision on the date of implementation will be made when the outcome of the Brexit negotiations becomes clearer.

I am not an expert on employment law, unlike Senator Nash. I am not sure that the Low Pay Commission is specifically precluded from re-entering its proposals once there is clarity on Brexit. I know there is an annual report, but it is written into the Low Pay Commission legislation that it cannot re-enter if circumstances materially change. I understand the point the Senator is making about the report, which is drawn up annually. The Government's position in the Budget Statement was clear that there were going to be no significant tax or expenditure changes in the context of the more likely circumstances of a disorderly Brexit. I bow to the Senator's expertise in the area. I will ask the Minister to revert directly to him to see if the findings of that report can be re-entered to Government, as I am not sure that the commission is strictly prohibited from doing so.