Dáil Éireann Debate, Thursday - 28 November 2013
18. Deputy Willie O'Dea asked the Minister for Social Protection the number of persons that will be affected by the budgetary changes to illness/injury benefit; if she will outline the future of PRSI based benefits and her strategy to retain or improve them; and if she will make a statement on the matter. [50830/13]
View answerThe social insurance system, funded by the Social Insurance Fund (SIF), is core to Ireland’s system of social protection and I am determined that it be protected for current and future generations. However the Fund is not in a healthy financial position. The third Actuarial Review of the Social Insurance Fund was completed by consultants KPMG in 2012. A key finding of that Review is that the Fund has a significant shortfall in 2011 of €1.5bn given expenditure of €9.0bn but income of only €7.5bn. In the absence of any action to tackle this shortfall, the 2011 deficit of €1.5bn will double to €3.0bn by 2019 and will have increased to €25.7bn by 2066. These figures refer to the projected annual deficit in the particular year in question.
The change in the number of “waiting days” from 3 to 6 before payment of illness benefit will apply from January next and it is estimated that approx. 220,000 claims a year will be affected.
The Social Insurance Fund operates on a “pay as you go” basis, with the Exchequer acting as residual financier of the Fund when there is a shortfall between contributions received and benefits paid. Following many years of surplus, the fund has operated in deficit over the last number of years. In a difficult economic environment the choices facing Government in order to ensure the sustainability of the Fund are to either increase contributions or reduce benefits. It is in this context that the decision was made to make this relatively modest adjustment to illness benefit.
