Pay-linked maternity benefit ‘next logical step’, says Minister, but Dáil hears welfare Bill ignores women

‘Landmark reform’ legislation to link unemployment benefit to pay

Full-time workers who lose their jobs will be the first to benefit from new legislation to link unemployment social welfare rates to their previous salary, according to Minister for Social Protection Heather Humphreys. But over time “we can build on and expand this”, and pay-linked maternity benefit “is the next logical step”.

Speaking in the Dáil as she introduced a “landmark reform”, the Minister said “we are opening the door today for that progress in the future”.

She said, however “if I had tried to introduce a Rolls-Royce, all-singing, all-dancing pay-related benefit system that covers every base that legislation would not be seen for years, and it certainly would not be before the House today or within the lifetime of this Government”.

The Social Welfare (Miscellaneous Provisions) Bill “is about establishing the principle of pay-related benefit in Ireland. My intention with this legislation is to get the train on the tracks by getting a pay-related benefit system up and running. That will be a seismic shift and reform of our social welfare system.

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“Over time I believe future governments will be able to build on this. Pay-related benefit will evolve – I have no doubt about that. For example, I absolutely believe we should have pay-related maternity benefit, and I think that is the logical next step.”

The new system will support workers by “ensuring they do not suffer that cliff-edge drop in income”. Those on average incomes who have at least five years of PRSI payments will receive €450 for the first three months of unemployment compared to the current jobseeker’s benefit of €232.

However, Independent TD Denis Naughten said the Bill, like the pension auto-enrolment legislation, “is discriminating against women who were leaving the workforce for caring roles”, including maternity leave.

He said Ms Humphreys had said about the pension legislation that they could look at it again. “The reality, however, is that only once in a decade do we get an opportunity to bring in this type of reform in relation to pension legislation and PRSI contributions.

“Disappointingly we are ignoring women again” in this legislation, and “putting women at a significant disadvantage in the longer term in respect of their pension contributions and their overall pension rate”.

Sinn Féin’s Donnchadh Ó Laoghaire said it was welcomed the Government moving on pay-related benefit, but his party will oppose it because of concern over PRSI increases for employees. He said former taoiseach Leo Varadkar in 2020 stated that PRSI increases would cost jobs but “Fine Gael has done a U-turn” and “this legislation has proposed a series of PRSI hikes for the next five years”, including increases for employees dealing with the cost-of-living increases. The party would not increase employers’ PRSI for small businesses until 2026.

Labour’s Duncan Smith said the Bill has the potential to be one of the “most progressive pieces of workers’ rights legislation” but it “could be undermined by unintentionally discriminating against some of our most vulnerable workers”. Workers in retail or hospitality and those in temporary employment may find it more difficult to meet the five years of PRSI contributions.

“The Government raises the flag that we have so-called full employment in this country. We have many people in good jobs but we also have an awful lot of people in underemployment in the so-called gig economy and in extremely insecure employment.”

People Before Profit TD Paul Murphy said employers’ PRSI in Ireland was among the lowest in Europe, and “even the higher employers’ PRSI rate of 11.05 per cent is less than half the EU average rate of 22.62 per cent. It is less than a quarter of what employers pay in France where the rate is 45 per cent. It should increase PRSI for employers by several per cent and not increase it for all employees.”

Marie O'Halloran

Marie O'Halloran

Marie O'Halloran is Parliamentary Correspondent of The Irish Times