Joe Sherlock (Cork East, Labour)
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Question 57: To ask the Minister for Social and Family Affairs if his attention has been drawn to a report from Mercer Human Resource Consulting that found that Ireland has among the lowest levels of statutory maternity benefits in western Europe; his views on how poorly Ireland's maternity benefit system compares to other European countries; the efforts he is making to address same; and if he will make a statement on the matter. [22992/06]

Séamus Brennan (Dublin South, Fianna Fail)
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The recently published study referred to reviews the levels and duration of maternity benefits across Europe and shows wide variations. The headline results which state that Ireland has one of the lowest levels of statutory maternity pay in Western Europe, however, warrants closer examination. The study does not take into account the net value of the payment received by the woman during her maternity leave, nor highlight who bears the cost of the benefit payment, nor does it bring out the statutory entitlement to longer, paid absences from employment for maternity purposes.

The study shows that, while women in a number of countries receive a higher rate of maternity benefit than those in Ireland, the payment in Denmark, France, the Netherlands, Spain and the United Kingdom is liable to both tax and social insurance contributions which will reduce the sum actually received by the woman. In Germany, Hungary, Italy and Sweden the payment received is liable to either tax or to social insurance contributions. Given the higher levels of tax and social insurance contributions that are generally paid by workers in these countries, the real value of maternity benefit paid to mothers is significantly diminished.

The survey pointed to the large variances in the number of weeks of paid maternity leave. As recently as March of this year, the duration of paid maternity leave was increased to 22 weeks as a result of Budget 2006, with plans in place to increase the period of statutory paid leave by a further 4 weeks in 2007 — bringing the duration of entitlement to maternity benefit to 26 weeks in total. By comparison Hungary provides 24 weeks; France, the Netherlands, Poland and Spain allow 16 weeks leave and Germany provides for 14 weeks maternity leave.

Other differences worth drawing out relate to the mechanisms for delivering the payment and the stability in the payment rate of the period of leave. In this country, the payment of cash benefits during statutory leave is funded from the social insurance fund. In some other countries, such as for example Denmark and the United Kingdom, these costs are transferred to the employer in the first instance, thus reducing the costs to the State. The survey also shows that maternity benefit is paid in a number of countries at a reducing rate over the period of maternity leave. In Ireland, however, the payment rate remains constant during the entire period of 22 weeks, thus ensuring continuity and stability in income over the period.

Maternity benefit has been increased significantly over the past five years in terms of both duration and the amount payable. In 2000, the rate payable was the equivalent of EUR219.41 per week over 14 weeks, or EUR3,071 for the duration. Maternity Benefit is now paid at a rate EUR265.60 over 22 weeks or EUR5,843 for the duration. This represents an increase of 90 per cent over a period wherein average industrial earnings increased by just 67 per cent. Further improvement in the duration of maternity benefit payments are planned for 2007.

Funding for maternity benefit comes from the social insurance fund, which is in turn financed through contributions paid by employers, employees and the self-employed. Social insurance contributions are generally payable by employees here at 4% and by employers at 10.05%, with further provision for reduced rates of contributions where workers are on low incomes. By comparison, employees pay 18.75% and employers 17-20% in Poland and in Spain, employees pay 4.7%, while their employers pay 23.6%, thus significantly increasing the fund available to meet the cost of maternity payments.

In the light of the analysis above, I am satisfied that the rates and duration of maternity benefit in Ireland represent a reasonable response to the income needs of women on maternity leave and can be favourably compared internationally. Further improvements in the maternity benefit scheme will continue to be examined in the context of the wider fiscal and social insurance environment.