asked the Minister for Social Welfare if he will give the total amount per week an employer will have to pay, from April next, in respect of an employee on the average national wage to cover social welfare, health and redundancy; and if he considers that this has the effect of taxing employment and therefore jeopardising job creation efforts.
Ceisteanna—Questions. Oral Answers. - Social Welfare Contributions.
21.
In June 1978, the latest date for which statistics are available, the average wage in the manufacturing and transportable goods industries was £72.48 a week. On the basis of this figure the employer's share of the fully pay-related social insurance contribution from 6 April next will be £6.34 per week.
This amount is in line with the total contribution for which an employer would be liable under the existing system from that date in respect of an employee on the average national wage after allowing for the normal increase in the stamp arising from this year's budget increases in the rates of social insurance payments. The changeover to the new system of paying social insurance contributions could not therefore adversely affect employment or job creation efforts and in so far as it provides relief for labour intensive industries employing lower paid workers can be regarded as having the opposite effect.
Does the £6.34 include health and redundancy charges?
The total percentage will be 13.15 and of that the employer will bear 8.75 per cent. That figure includes the social welfare contribution.
The question asked for the figures for health and redundancy. Does the Minister have them?
I am sorry, it does include them.
Would the Minister not accept that £6.34 represents a tax on employment? Would he accept that the pay-related changes introduced will be beneficial to those who employ cheap labour but not to those why pay their employees well? As this is a tax on employment, would the Minister not at least look at alternative means of paying social insurance?
My understanding of the position was that everyone connected with the situation had pressed for the adoption of this system for many a long year and we now have it in operation. There are many benefits arising from it, the principal one being that the lower paid worker and the industries employing them will pay less while those industries which are in a position to pay more will do so.
Will the Minister accept that there are many long-established firms, including some with which I am connected, which have to pay as much as £500 per employee per year and that that is a very positive disincentive to further employment? In the circumstances, to increase the likelihood of jobs would he not at least look at the possibility of part-replacing social insurance in some way?
No.
Does the Minister not accept that this is a tax on employment?
Social insurance is one of the fundamental benefits and necessities of employees, and this is a major step forward in the administration of social insurance. I could not promise the Deputy to consider any alternative at present.
Would he not accept that it must be a very significant disincentive for employers to employ more people——
No.
——when there is such an immediate charge on each employee?
I do not accept that. I do not think anybody in the trade union movement, or anybody concerned with creating employment, would agree with the Deputy.
Question No. 22. We have had enough argument.
I know for a fact that there are employers in this city who want to employ more people but because of this disincentive——
That type of employer objects to social insurance anyway.
No.