Dáil Éireann debate -
Wednesday, 26 Jun 2024

I move amendment No. 2:

In page 7, between lines 27 and 28, to insert the following:

“Report on revised and progressive schedule of PRSI increases

4. The Minister shall, within three months of the passing of this Act, prepare and lay before Dáil Éireann a report on a revised and progressive schedule of PRSI increases in the years 2024 to 2029 which maintains the rate of employee PRSI at 4 percent.”.

The amendment is related to the previous one. I thought this one might be ruled out of order and the first might be ruled in. It is the first time I have seen a deletion of lines ruled out of order due to a charge on the Exchequer. It is a peculiar adjudication, I must say. It is similar to the sections we raised during the Committee Stage discussions. We agree with the proposal to move towards a pay-related jobseeker's model. Our concern relates to the increases in PRSI during a cost-of-living crisis for employees. I outlined in detail on Second Stage how the Social Insurance Fund could be kept on a sustainable footing by increasing PRSI for employers with regard to employers' PRSI on incomes above €100,000. That would keep the fund sustainable over the next couple of years. In any event, that is our view. We do not agree with the increases in PRSI. That is the purpose of amendments Nos. 1 and 2, albeit amendment No. 1 was ruled out of order.

As regards amendment No. 1, it is out of my hands. I do not rule them in or out of order. Regarding amendment No. 2, I made the point previously about including commitments in primary legislation to producing reports, particularly legislation that is already as complex as the Social Welfare Consolidation Act.

The actuarial review of the Social Insurance Fund, published in March 2023, is a very detailed and comprehensive report with a wide range of scenarios examined and fully costed. One of its findings was that the fund will experience significant long-term sustainability challenges. This is mainly driven by the challenges Ireland will face in relation to demographics, and especially the ageing of our population. The need to take action now has also been highlighted by the Economic and Social Research Institute and the Irish Fiscal Advisory Council. The actuarial review sets out a range of options to address the sustainability challenges it identified.

After detailed consideration the Government's view is that it is better to act early with modest increases to avoid later excessive cost burdens on employees, employers and the self-employed through a failure to act in a timely manner. A 0.1 percentage point increase means 90 cent per week for a worker on average earnings. These increases will support the retention of the State pension at 66 years of age and will help address the long-term sustainability challenges facing the Social Insurance Fund. It will also provide for the jobseeker's pay-related benefit.

In March, a report was published by the Department of Enterprise, Trade and Employment on the cost impact on businesses arising from improvements in employment conditions, including the increase in the national minimum wage, the introduction of auto-enrolment, and statutory sick pay. Last month, in response, the Government agreed to a range of measures to reduce costs for small and medium-sized businesses. I am satisfied that the approach decided by the Government in relation to PRSI over the next number of years achieves a fair balance between addressing the long-term sustainability of the Social Insurance Fund without unduly impinging on the incomes of workers and the cost of doing business in Ireland. If we do not increase employees' PRSI and rely solely on increases in PRSI for employers and the self-employed, this would clearly lead to very significant pressures on employers regarding the affordability of retaining staff, expanding their workforce and generally keeping their businesses sustainable.

A further review of the adequacy of the social insurance rates will be carried out once the next actuarial review is completed in 2027. Given the extensive analysis already in the public domain, including the actuarial review and the Government commitments to a moderate and reasonable path, I am not accepting this amendment to prepare a report. I have answered several parliamentary questions in the past weeks costing different PRSI scenarios. Those scenarios cover a number of years. That is the best way to get the information. I do not believe it is necessary to put it into legislation.

As the Minister will be aware, sometimes we look for reports as a means of tabling an amendment to social welfare legislation. I thought a proposal to delete a few lines might be accepted, but there you go. It seems we will have to be more creative again next time.

We have had a fair bit of discussion on this. The Minister and I obviously do not agree but I am not disputing that there may be a need for increases in employers' and employees' PRSI in the long run. At this juncture, however, we do not believe it is necessary given the cost-of-living crisis and the scope that exists in terms of employers' PRSI on incomes over €100,000. We have had the discussion, however, so we could probably leave the matter as it is. The Minister knows our position on the Bill.

I thank Deputy Ó Laoghaire and all Deputies for their contributions. This is very important legislation which will now move on to Seanad Éireann. It will make a difference in a lot of people's lives through pay-related benefit and as regards the sustainability of the Social Insurance Fund going forward. A lot of people contributing a little will make a big difference. I thank the Leas-Cheann Comhairle and Deputies for their co-operation.