The latest legislation set to provide social welfare for unemployed full-time workers linked to their former wages is set to first aid those who have lost their jobs, as revealed by the Minister for Social Protection, Heather Humphreys. As time passes, the plan is to extend the program, with the next logical measure being pay-associated maternity benefit.
As she presented this substantial reform in the Dáil, the Minister described it as laying the groundwork for future advancements. She acknowledged that her aim was not to implement an exhaustive, luxurious benefit system related to pay from the onset as such a system would need years to materialise and would not be established during the government’s current term. The innovative legislation, Social Welfare (Miscellaneous Provisions) Bill, is crucial to establishing the idea of a pay-associated benefit in Ireland. The Minister aims to kick-start this system, stating that this will represent a profound reshaping of Ireland’s social welfare system.
In time, Humphreys envisages that subsequent governments will build on to this foundation. The pay-associated benefit is liable to development and Humphreys is confident this is the case. She strongly believes that a pay-associated maternity benefit should be introduced and deems that to be the logical route to take next.
The fresh system is designed to aid workers by ensuring they do not experience a sudden drop in their income. Those on medium-level earnings who have made at least five years of PRSI payments will receive €450 for their initial three months of unemployment, compared to the current jobseeker’s benefit amount of €232.
Nonetheless, Independent TD Denis Naughten expressed his belief that the Bill, similar to the pension auto-enrolment legislation, bears a discriminatory aspect against women who take a break from their employment for the purpose of caregiving roles, which includes maternity leave.
Ms Humphreys voiced potential reconsiderations regarding pension legislation. Unfortunately, opportunities for such legislative reform only arise every decade and it involves not only issues surrounding pension regulation but also PRSI contributions. However, critics argue that the current legislation overlooks women, once again putting them at a substantial long-term disadvantage when it comes to their pension contributions and overall pension rate.
Sinn Féin representative Donnchadh Ó Laoghaire acknowledged the government’s initiative to address pay-related benefits. However, the party was concerned with proposed PRSI tax hikes for workers and would therefore reject the bill. He recalled former taoiseach Leo Varadkar’s 2020 statement warning that PRSI hikes could lead to job losses and criticised Fine Gael for undertaking a drastic policy reversal. According to the proposed bill, PRSI taxes would increase over the next five years, which could be a concern for workers coping with living cost inflation. Sinn Féin, however, would withhold from raising PRSI for small businesses until 2026.
Labour’s Duncan Smith believed that the bill had the potential to revolutionise workers’ rights legislation. Nevertheless, it could unintentionally discriminate against vulnerable workers, including those in the retail or hospitality sectors or temporary roles, who might face difficulties in fulfilling the five-year PRSI contribution prerequisite.
The government purports that their country has achieved full employment. While it’s true that many have secured good jobs, a significant number are stuck in the ‘gig economy’, facing underemployment and insecure work conditions.
Meanwhile, Paul Murphy from People Before Profit pointed out that employers’ PRSI in Ireland was significantly lower than the European average, with the higher 11.05% rate being less than half of the average European rate of 22.62%. In comparison to France, where employers contribute 45%, Irish employer rates are notably modest. He advised increasing the PRSI for employers by several percent but maintaining the current rate for all employees.