Paul Gavan (Sinn Fein) | Oireachtas source

The Minister, Deputy Humphreys, is very welcome as always. There are two primary elements to this legislation. One relates to the pay-related jobseeker's benefit, which we very much welcome, and the other relates to the PRSI increase, which we are not in favour of. 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 submitted by my colleague Deputy Claire Kerrane with regard to the various consultation processes.

One of the flaws of the initial model brought forward by the Minister was the difference between the six months and the nine months. This has been rectified and we very much welcome that. This is a welcome step. The Minister's proposal was in line with the intended reforms that 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 but still had a mortgage or rent, and possibly childcare costs, 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 loss of 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. In the context of our social insurance payments, our replacement rates do not compare well against many other countries. The rates contrast poorly with other EU countries, particularly those where social insurance-based welfare benefits are pay related and designed to secure a worker's normal living standards during periods of unemployment 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 payments 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 benefits or illness benefits.

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 or 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 it. Rent, mortgage payments, electricity and heating costs, food bills and much more will continue whether someone is in work or not. Our social protection system should provide supports to ensure 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 for 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 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 their previous level of income.

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.

The primary reason we do not support the overall Bill 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 that increases in PRSI would cost jobs. Fine Gael performed a U-turn, however, 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 will lose €280 per year in disposable income. Sinn Féin would not increase taxes on the wages of low and middle income earners, 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 substantially increased costs from energy and input costs to labour costs. This 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 and 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 small and medium sized businesses, 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 a Social Insurance Fund and social safety net. This is why Sinn Féin would introduce a higher rate of employer PRSI on the portion of salaries in excess of €100,000. I will leave it at that.