Dáil Éireann Debate, Thursday - 19 May 2022
77. Deputy Louise O'Reilly asked the Tánaiste and Minister for Enterprise, Trade and Employment his views on the second instalment of the Central Statistics Office’s Personal and Work-Life Balance Survey 2021 which found that nearly a quarter of people in full-time employment are struggling to make ends meet. [25347/22]
View answerA priority for the Government is that work should always pay and that there should not be any disincentive to work. The Government has taken many steps to achieve this aim while also addressing the challenges that have arisen in relation to the cost of living.
Ireland currently has one of the highest minimum wage rates in the EU. Of the 21 EU Member States that have national minimum wages, Ireland has the second highest national minimum wage in terms of gross monthly rates. When adjusted for purchasing power standards (PPS), Ireland ranks at sixth place. Since the establishment of the Low Pay Commission in 2015, Ireland’s National Minimum Wage has increased from €8.65 per hour to €10.50 per hour between 2016 and 2022. This increase has resulted in a 21.4% increase in the National Minimum Wage. This compares with an increase in consumer prices of 7% in the six years to December 2021 so the National Minimum Wage has increased substantially in real terms over recent years.
Several measures have also been taken to help with recent increases in the cost of living. Budget 2022 contained a large range of measures to protect households from the rising cost of living, including a personal income tax package worth €520 million and a social welfare package of over €550 million. There were also increases in the allocation of Early Learning and Care and School-Age Childcare to ensure childcare prices do not rise. The cost of the Drug Payment Scheme was reduced to €80. The working family payment increase announced on Budget Day was brought forward from 1 June to 1 April, and a reduction in the rate of VAT on gas and electricity from 13.5% to 9% has also been introduced until the 31st of October. A temporary 20% reduction in public transport fares applicable from April until the end of the year has also recently been put in place.
The Government has also acted quickly and decisively to introduce measures aimed at offsetting the increased cost of living for social welfare recipients. In March, a once-off lump sum of €125 was paid to all households in receipt of the Fuel Allowance payment, at a cost of approximately €49 million. A further additional lump sum payment of €100 is being paid to these households from this week – a payment equivalent to over 3 weeks additional Fuel Allowance – costing €37 million. Taken together with the €5 increase in Fuel Allowance announced as part of Budget 2022, this means that low-income households will see an increase of 55% in Fuel Allowance support provided during this fuel season compared to last season.
In response to the effects of the pandemic, the Government also launched the Pathways to Work 2021 - 2025 strategy which is a key part of the national Economic Recovery Plan. This strategy includes employment advice and guidance, job matching, employment programmes, and opportunities for upskilling. In addition to reducing long-term unemployment and reducing the youth unemployment rate, this strategy also aims to improve labour market transitions and to ensure better labour market outcomes for all. As part of this strategy, each new jobseeker will be provided with access to a Benefit of Work statement using an online Benefit of Work calculator. This strategy builds on the Make Work Pay action plan contained in the Comprehensive Employment Strategy for People with Disabilities (2015 - 2024).
There is also a Programme for Government commitment to progress to a living wage over the lifetime of the Government. One definition of a living wage is that it is ‘the average gross salary which will enable full-time employed adults (without dependents) to afford a socially acceptable standard of living.’ This goes beyond the need for workers to earn just enough to cover their basic expenses and to make ends meet but would also enable them to participate and contribute more fully in society by having more discretionary income available to them.
In 2021, I asked the Low Pay Commission to examine the programme for Government commitment to progress a living wage over the lifetime of the Government and to make recommendations to me on how best we can achieve this commitment.
The Low Pay Commission submitted its Living Wage Report to me on 31 March 2021, along with the research report from NUI Maynooth. I am considering the next steps required in the progression to a living wage and intend to bring proposals to Government shortly, including the publication of the Commission’s report and the accompanying research report.
