ILO-en-strap
NORMLEX
Information System on International Labour Standards
NORMLEX Home > Country profiles >  > Comments > All Comments

DISPLAYINEnglish - French - Spanish

CMNT_TITLE

The Committee notes the information provided by the Government in its 43rd annual report on the application of the European Code of Social Security, which covers all accepted Parts of Convention No. 102 (Parts III, IV and X), as well as the relevant information provided in the previous reports on the Code and ratified ILO social security Conventions consolidated by the Committee in a single document for ease of use.
Part III (Sickness benefit) of the Convention, Article 69(f) and (g). Suspension of benefit. According to section 46 of the Social Welfare Consolidation Act 2005 (as amended), illness benefit payment may be stopped if the claimants, inter alia, become incapable of work through their own misconduct or behave in a way that is likely to delay their recovery. Please explain how these reasons for the disqualification are defined and applied in practice by the Department of Social Protection Deciding Officers and whether courts of law or other tribunals have given decisions in this respect.
Part III (Sickness benefit), Article 18(1). Part IV (Unemployment benefit), Article 24(1). Limits to the duration of benefit . (a) Days of benefit. According to the report, illness benefit is paid on a six-day week basis (Monday to Saturday), while jobseeker’s benefit is based on a seven-day week (Sunday is treated the same as any other day in the week, as a day of employment or unemployment as appropriate). Please explain the difference in the number of days in a calendar week for the purpose of paying illness or jobseeker’s benefits and in the manner in which these days are defined and compensated under both schemes.
(b) Periods of incapacity for work. According to the report, illness benefit is paid for each day on which an insured person is unable to work due to illness defined as a “day of incapacity for work”. Any three days of incapacity for work, whether consecutive or not, within a period of six consecutive days are treated as a period of incapacity for work and any two such periods, not separated by more than three days, are treated as one period of incapacity for work. In comparison with the Irish law, in the Convention the term “day” means a calendar day, the term “week” means seven consecutive days, and the benefit must be paid “in each case of sickness” throughout its duration, which may be limited to 26 weeks. Please explain what period or periods of incapacity for work recognized in Irish law would constitute one case of sickness for the purpose of the Convention, how many calendar days in one case of sickness may not be compensated as “days of incapacity for work”, and in what manner the waiting period for the first six days of a claim would be applied to each case of sickness.
(c) Age limit. Articles 14 and 20. According to the report, an insured person may receive illness benefit and jobseeker’s benefit up to the day before attaining the pensionable age (currently 66 years), which will rise to 67 in 2021 and 68 in 2028. The Committee understands from this information that while a considerable number of insured persons are expected to continue working beyond the current pensionable age, they will lose any further insurance protection in case of sickness or unemployment; illness or jobseeker’s benefit currently in payment will be automatically stopped on the day of the person’s 66th birthday, irrespective of the fact of whether or not the person concerned qualifies for receipt of an old-age pension. The Committee points out that the benefits in question shall be granted throughout the contingencies of sickness and unemployment, which are defined in the Convention by reference to the working ability of the persons protected without regard to their age. The Committee therefore asks the Government to explain how protection under Parts III and IV of the Convention is ensured to an employee who fell sick or lost his employment after attaining the age of 66 years, but has not yet paid the 520 contributions required for receipt of state Pension (Contributory).
Part III (Sickness benefit), Articles 17 and 18(1). Length of the qualifying and waiting periods. Part IV (Unemployment benefit), Article 23. Length of the qualifying period. In its 2016 Resolution on the application of the European Code of Social Security by Ireland, the Committee of Ministers of the Council of Europe asked the Government to be more precise in stating its intentions to bring the present parameters of the waiting period for the illness benefit (six days instead of three) and of the qualifying periods of contribution for the illness and jobseeker’s benefits (two years instead of several months) in line with those established by Articles 17, 18(1) and 23 of the Convention/Code No. 102. In response, the Government states that significant welfare savings taken as part of fiscal consolidation under the EU/ECB/IMF Programme for Support for Ireland ranged from reductions in weekly rates of payment to the abolition of certain schemes and included increasing the qualifying contribution conditions for illness benefit and jobseeker’s benefit in the Budget 2009 and increasing the number of waiting days for illness benefit in the Budget 2014. Over the period from April 2009 until 2014 savings in the order of €4 billion were introduced in social welfare expenditure. As the Government has restored financial stability, exited the EU/ECB/IMF Programme for Support for Ireland, since the Budget 2015, there has been scope, albeit limited, for social welfare improvements of €198 million aimed at low-waged households, the long-term unemployed, people with caring responsibilities and the elderly. This increased to €251 million in the Budget 2016, which represented 32.5 per cent of new current expenditure measures by the Government. However, in view of many competing requirements faced by the Government at this time it was not in a position in the Budget 2016 to limit the six-day waiting period for employees covered by work sick-pay schemes.
The Committee understands the difficult choices facing the Government to successfully steer Ireland’s welfare system through fiscal consolidation while maintaining the weekly rates of welfare payments and the inclusive nature of the overall system of supports. It takes due note of the Government’s statement that though its social security arrangements in respect of the qualifying contribution conditions for illness benefit and jobseeker’s benefit and the number of waiting days for illness benefit are not technically in accordance with the Convention/Code No. 102, Ireland remains determined to meet the requirement of all accepted Parts of the Code. As requested by the Committee of Ministers, Ireland’s obligations under the Code will be brought to the attention of the Minister for Social Protection for consideration in the context of the Budget 2017. The Committee notes in this connection that, in order to inform the policy options of the Minister, the Department of Social Protection undertakes social impact assessments of a wide range of social welfare budget options and packages in advance of the budget. Taking into account the increasing fiscal space for welfare programmes, the Committee would like the Department of Social Protection to undertake, in accordance with Article 71(3) of the Convention, a cost estimate and a social impact assessment of bringing the qualifying contribution conditions for illness benefit and jobseeker’s benefit and the number of waiting days for illness benefit into conformity with the Convention/Code.
Part IV (Unemployment benefit), Article 68. Suspension of benefit. The Committee has examined consolidated information from the Government’s reports on the Code and Convention No. 102 since 2011. It notes that the spectacular decrease in the unemployment rate from over 15 per cent in 2012 to 7.8 per cent in June 2016 has been accompanied by a marked strengthening of the regime of sanctions for non-compliance with a wide range of activation measures introduced by the authorities:
  • (a) Thus, Sections 12 and 13 of the Social Welfare and Pensions (Miscellaneous Provisions) Act 2013 provide for a strengthening of the sanctions which apply in the case of refusals to engage with activation measures, including failure, without good cause, to participate in prescribed employment or work experience programmes and courses of education, training and development. As these sanctions are aimed at compelling a jobseeker to accept prescribed employment or activation measures under the threat of losing jobseeker’s benefit, the Committee asks the Government to explain to what extent “prescribed” employment, training or similar activation measures are deemed to be “suitable” in terms of Article 20 of the Convention/Code and what is considered to be “good cause” for refusal to participate in such measures.
  • (b) According to the 2012 report on Convention No. 102, the disqualification for up to nine weeks for a refusal of an offer of suitable employment applied previously by the Deciding Officers of the Department of Social Protection has been replaced by a full disqualification. Indeed, Part 4: Disqualifications of the Jobseeker’s Benefit Guidelines (web-reference provided in the 2016 report on the Code) starts with the provision for a full disqualification for refusal of an offer of suitable employment, but in point (a) on the same page this offence is still punished by a disqualification for up to nine weeks. Please indicate which of these guidelines the Deciding Officer should apply. Article 69 of the Convention in this respect allows suspension of benefit “to such extent as may be prescribed”, it being understood that the sanction should be proportional to the gravity of the offence committed by the jobseeker. On the scale of the gravity of offences listed in Article 69, full disqualification might be appropriate in cases of a fraudulent claim (subparagraph (d)) or a criminal offence committed by the person concerned (subparagraph (e)), which are based on objective evidence and corresponding decisions of the courts. In contrast, disqualification for refusal of an offer of suitable employment is imposed by the Deciding Officer on the basis of his/her discretionary evaluation of what is “suitable” for the person concerned and whether this person places “unreasonable” restrictions on the nature of the employment sought, the hours of work, the rate of pay, the duration of the employment, the location of the employment, or any other unreasonable restrictions on the conditions of employment which he or she is prepared to accept. The Committee considers that such regulations give very wide discretionary power to the Deciding Officers to impose the extreme sanction of full disqualification for jobseeker’s benefit. Such administrative power, if abused in the zeal of the activation policies, may transform the unemployment benefit scheme into a system of economic compulsion to work under the threat of losing replacement income. As a safeguard against such development which would be contrary to the protective nature of social security benefits provided under the Convention, the Government may consider, on the example of other European countries, to allow full disqualification only after refusal of the second offer of suitable employment, re-establishing in the case of the first refusal, the sanction of disqualification for up to nine weeks depending on the individual circumstances of the claimer.
  • (c) In its 2015 conclusion on the Code, the Committee asked the Government to provide proof that the Jobseeker’s Benefit Guidelines are applied by the Deciding Officers in such a way as to ensure that, in a situation where a person loses a job through misconduct, she/he would not suffer a further penalty of disqualification for receiving a jobseeker’s payment if the conduct, though blameable and giving sufficient grounds for dismissal, was not wilful. The Committee finds that the Jobseeker’s Benefit Guidelines are not clear on this issue as on one and the same page in Part 4 they permit disqualification for “loss of employment because of wilful misconduct” and “(b) Loss of employment through his/her own misconduct”, the latter illustrated by such examples as “bad time-keeping without valid reason” or “unreasonable behaviour at work”, which are not necessarily wilful behaviours. The Committee asks the Government to edit the Jobseeker’s Benefit Guidelines so as to eliminate all doubts that the misconduct of the person concerned may be punishable by the suspension of benefit only if such misconduct was wilful and has directly caused the contingency in question, in line with Article 69(f) of the Convention.
Part XI (Standards to be complied with by periodical payments), Article 66. Reference wage. With reference to the explanations contained in the ILO Technical Note published in Ireland’s country profile in NORMLEX, the Committee notes that, in accordance with Article 66(4)(b) of the Convention/Code No. 102, the Government determines the reference wage by reference to the category of “Other” in the Structure of Earning Survey (SES), which is based on the UK Standard Occupational Classification (SOC2010), with modifications to reflect Irish labour market conditions, and corresponds to International Standard Classification of Occupations (ISCO-88) Group 9. For the purposes of calculations in the report, the mean weekly earnings by male workers in the “Other” category have been used. This aligns to weekly payments of most benefits in Ireland. The weekly rate of earnings aligns to the data on monthly earnings. This will be used as the basis for the reference wage in the future.
Part XIII (Miscellaneous provisions), Article 76(1). Consolidated report on the Code and ILO social security Conventions. In its 2015 conclusions on the Code, the Committee invited the Government to coordinate the fulfilment of its compliance and reporting obligations under the Code, Convention No. 102 and the relevant provisions of the European Social Charter, 1961, with a view to improving the quality and consistency of the information provided in the reports. To facilitate the integrated management and comparative analysis of Ireland’s obligations under different social security instruments, the Committee referred the Government to the coordination tables, reporting timelines and relevant comments of the supervisory bodies compiled in the ILO Technical Note on the state of application of the provisions for social security of the international treaties on social rights ratified by Ireland, published in the country profile in NORMLEX. Consequently, the Committee has consolidated the information provided in the previous reports on the Code and ILO social security Conventions supplied during the period 2006–16. The reports supplied by Ireland prior to 2006 were not taken into account as the information contained in them is likely to be outdated. The information included by the Government in its reports but not directly relevant to the legal obligations under the respective provisions of the Code and ILO Conventions has not been retained. The resulting consolidated report (CR) thus contains all the relevant information provided by Ireland over the last decade on the application of these instruments and greatly improves the quality of reporting in terms of the consistency of the information available, coherence across different schemes and benefits providing protection, and the efficacy of the regulatory framework governing the national social security system.
With regard to the completeness of the available information, the CR reveals certain information gaps concerning indicated provisions and relevant questions of the report forms on the Code and ILO Conventions are included as a reminder to complete the CR with the requested information. With respect to the clarity of the information provided, particularly as regards rules and elements taken into account for the calculation of the level of benefits, in many instances it requires technical clarifications from the national experts and concrete references to the corresponding provisions of the national regulations. In order to facilitate the experts’ dialogue on these highly technical issues which depend upon the context in which they are used, the statements in question are highlighted and appropriate marks and questions are entered by the Committee directly in the text of the CR in square brackets. In view of the significant volume (125 pages) and the complexity of the CR, it is also equipped with user-friendly navigation signs and summary tables. The Committee attaches the CR to the present comments and asks the Government to complete it in the next reporting period with the missing information, technical clarifications, provisions of the national legislation and updated statistics.
Sources and consistency of statistical data. According to Article 76(1)(b), the reports on the Convention shall include evidence of compliance with statistical conditions specified with respect to the number of persons protected, the rates of benefits and the proportion of the financial resources constituted by the insurance contributions of employees protected. It should be noted that the same statistical information given in different reports often comes from different sources and databases used by different government agencies contributing to the report, and is not compatible. It is also not uncommon for the source of information not being indicated at all or the exact data being replaced by ad hoc estimates. The Committee recalls that one of the main characteristics of the Code and ILO social security Conventions consists in that compliance with their provisions is established by reference to precise numbers and percentages, which makes the quality, consistency and comparability of the statistical information an essential condition of the effective functioning of the supervisory mechanism. The Committee has therefore elaborated a simplified template for the statistical data requested in the report forms on the Code and ILO Conventions, which is attached to the present conclusions, and has prefilled it with the data given in the Government’s latest reports, which may at times appear to be divergent or controversial. The Committee asks the Government to check the data for consistency, to fill in the lacking information, to align the data for the same time basis to enable comparison, and to specify the official sources of statistics which shall henceforth be continuously used by the Government for this purpose.

CMNT_TITLE

The Committee notes the Government’s report on the Convention received in September 2012, which contains a reply to the direct request of 2006. It also notes that the 39th annual report on the application of the European Code of Social Security replies to the questions raised by the Committee in the direct request of 2011.
Part III (Sickness benefit), Article 17; and Part IV (Unemployment benefit), Article 23. Length of the qualifying period. In its 2011 direct request the Committee observed that, in comparison with other European countries, a two-year qualifying period for sickness and unemployment benefits was excessive and asked the Government to consider modifying the length of the qualifying period so that it would be long enough to preclude abuse, while remaining sufficiently short for not impeding access to the sickness and unemployment benefits of a minimum duration of at least 26 and 13 weeks, respectively.
In reply, the Government highlights the significant differences that exist between the Irish social welfare system and the systems in other European countries: Irish rates of social insurance contributions, which are fully reckonable for all benefits and pensions, are among the lowest in the OECD, while in return a typical employed contributor can expect to receive over his lifetime three times what he contributes to the social insurance fund. Accordingly, the Government feels that the qualifying conditions as they stand strike a reasonable balance between access to benefits and the contribution required from insured persons. Nevertheless, the Government agrees to reconsider the qualifying conditions for the sickness and unemployment benefit schemes in the context of the on-going review and reform of Ireland’s social welfare system. In this connection, the Committee would like to emphasize that though the Irish scheme may have established a proper balance between the qualifying conditions and the subsequent duration of the benefit, the present design of the sickness and unemployment benefits results in obstructing access of the persons protected to the minimum benefits guaranteed by the Convention. The Committee would like the Government to keep this consideration in mind in reforming the Irish social welfare system.
Part XII (Common provisions), Article 71(3). General responsibility of the State for the due provision of benefits. (a) Reductions and discontinuation of benefits. The 39th report on the Code recalls that Ireland is engaged in a multi-annual programme to reduce its structural deficit and to put public finances on a sustainable footing. This is seen as a requirement for future economic stability and growth, as well as being a prerequisite for maintaining and developing the social protection system. Even allowing for the adjustments which have already taken place there is still a €16 billion shortfall in Government finances. Social welfare expenditure is a major component of overall Government expenditure accounting for some €21 billion, or 40 per cent of all current expenditure in 2012. Accordingly, it cannot be immune when it comes to overall budget adjustments. In 2012 the Government was aiming for an adjustment of €3.8 billion through a combination of tax increases and reductions in day to day spending. The contribution to be made to this target by the social welfare budget is €0.475 billion or just over 2 per cent of overall expenditure. The Government has committed to maintaining the personal rates of benefits at their current level and this was achieved in the 2012 Budget. In excess of 50 per cent of the savings envisaged for the social welfare budget this year are to come from five areas: changes to the rebate employers receive on redundancy payments, a reduction in the period covered by the winter fuel allowance from 32 to 26 weeks, changes to some Child Benefit rates, adjustments to the Rent and Mortgage Interest Supplement Scheme, and adjustments to the amount of earnings allowed under the One-Parent Family Payment scheme. The balance of the savings required will be achieved through small changes across a variety of other schemes. Even allowing for the reductions in rates which did take place, the improvement in the position of welfare recipients achieved during the period of unprecedented growth in social welfare payments before the crisis has to a large extent been maintained.
The Committee notes the changes to the social welfare code arising from the EU/IMF Programme of Financial Support for Ireland detailed in the Government’s report on the Code. It observes that the changes introduced by the Social Welfare Act 2011 and the Social Welfare and Pensions Act 2012 continue the trend to reduction or abolition of a number of social benefits. Cuts in various benefits are effected throughout the system with a unique view to achieve the required volume of overall reduction in expenditures on social welfare. Taking into account that the objectives to reduce public finances set under the EU/IMF Programme of Financial Support for Ireland are far from being accomplished, the Committee would like the Government to state when it expects to stop the trend to downsizing Ireland’s social welfare system, what new cuts in benefits are foreseen in the 2013 Budget, and whether it has fixed for itself any threshold precluding any further reduction of social expenditures.
(b) Deficit of the Social Insurance Fund. According to the 39th report on the Code, the operating deficit of the Social Insurance Fund over the period 2008 to 2011, inclusive, was very close to €7 billion. Estimates for 2012 provide for a deficit of nearly €1.82 billion. Significant Exchequer subvention will be required to meet on-going expenditure requirements in the absence of reductions in expenditure levels or increases in PRSI income. In this respect, the Committee notes that the Actuarial review of the Fund was due to be published in 2012. It would like the Government to explain the main findings and recommendations of the review in its next report and to indicate measures taken to provide appropriate subvention to support the SIF in the short term and to return it on the sustainable financing footing in the long term.
Social security and reduction of poverty. (a) National indicators of poverty. According to the 39th report on the Code, Ireland uses three national indicators of poverty: (1) at-risk-of-poverty, using a threshold of 60 per cent of median equivalized income; (2) basic deprivation, defined as enforced lack of two or more items from the 11 item index of necessities such as food, clothing, heating, as well as social activities; (3) consistent poverty, a measure of multiple poverty combining at-risk-of-poverty and basic deprivation. This last indicator is used to set Ireland’s national poverty target which is to reduce consistent poverty to 4 per cent by 2016 and to 2 per cent or less by 2020, from a 2010 baseline rate of 6.2 per cent. This equates to 200,000 people. With respect to the dynamics of poverty, the report indicates that while in the period 2003 to 2007–08 poverty fell by a significant amount, since the onset of the economic recession in 2008 it has increased using all three national indicators: at-risk-of-poverty increased from 14 to 15.8 per cent; basic deprivation grew from 11.8 to 22.5 per cent; consistent poverty increased from 4.2 to 6.2 per cent. Compared to 2003, poverty in Ireland is still below the levels pertaining in the early 2000s on two of the three national indicators. However, the basic deprivation rate is above the 2003 baseline rate by seven percentage points. The Committee would like the Government to explain the discontinuation of which social welfare benefits has contributed to the sharp increase of basic deprivation in the country and the adoption of what measures may help to reverse this trend.
(b) Minimum welfare rate. The report further indicates that, over the period 2003 to 2010, the minimum welfare rate as a proportion of the at-risk-of-poverty threshold increased from 71 per cent to 95 per cent. Including fuel allowance which is a means tested household payment, the minimum welfare rate increased from 75 per cent to 100 per cent. The improvement in the minimum welfare rate as a proportion of the at-risk-of-poverty threshold was primarily due to increases in welfare rates and child benefit in the 2000s. However, in 2010, the minimum welfare rate was reduced to €196 per week and to €186 in 2011. There was no reduction in 2012. Data on the at-risk-of-poverty threshold for 2011 and 2012 are not available. The Committee notes with concern that in the period 2008–10 the number of persons finding themselves at risk of poverty increased from 14 to 15.8 per cent. It cannot but emphasize that maintaining the minimum welfare rate above the at-risk-of-poverty threshold represents the principal guarantee against the risk of the beneficiaries sliding into basic deprivation and consistent poverty and the welfare system failing to fulfil its main objective. The Committee trusts therefore that the Government will be able to show in its next report on the basis of the available statistical data that the minimum welfare rate together with the fuel allowance was being kept equal or above the at-risk-of-poverty threshold in each year since 2010 when it first attained this threshold.

CMNT_TITLE

The Committee notes that the Government’s report has not been received. The following comments are therefore based on the information provided by the Government in its 36th, 37th and 38th annual reports on the application of the European Code of Social Security.
Part III (Sickness benefit), Article 17, and Part IV (Unemployment benefit), Article 23 of the Convention. Length of the qualifying period. The Committee notes that in order to qualify for Illness Benefit or Jobseeker’s Benefit, a person must have paid at least 104 weekly Pay Related Social Insurance Contributions (PRSI) since they first started work. In its 36th annual report on the Code, the Government explained that the intention of introducing a two-year qualifying period was that young persons or migrants should not qualify for substantial benefits, regardless of financial need, following a relatively short period of employment. Where such need exists, alternative means-tested supports may be claimed. The Committee observes that, in comparison with other European countries, a two-year qualifying period for sickness and unemployment benefits is excessive and is motivated by the desire to limit access to benefits for certain categories of insured persons in order to obtain financial savings in sickness and unemployment insurance schemes. The Committee is bound to point out that the protection with respect to the short-term contingencies in the international social security law is based on the principle of unobstructed access to guaranteed minimum benefits for all persons protected. This principle is realized in the trade-off achieved between the duration of the qualifying period to gain entitlement to the benefit and the duration of the payment of the benefit itself: the Convention permits to limit the duration of the payment of benefit on condition that there would be no or a very short qualifying period necessary only to preclude abuse. In that way the Convention guarantees that the persons protected will be granted unobstructed access to benefits of at least a minimum duration immediately after their employment and insurance status is regularized in the social security institution allocating the benefit. Beyond this minimum equation, the Convention permits that the insured persons who have completed a longer qualifying period would be entitled to a longer period of the benefit payment. In Ireland, the situation appears to be different in the sense that both the qualifying period and the duration of the benefit are much longer than the minimum parameters established by the Convention. While, in the opinion of the Government, the Irish scheme may have established a proper balance between the duration of the qualifying period and the subsequent duration of the benefit, such design of the sickness and unemployment benefits nevertheless results in obstructing access of the persons protected to the minimum benefits guaranteed by the Convention. In the light of these explanations, the Committee would ask the Government to consider modifying the length of the qualifying period so that it would be long enough to preclude abuse while remaining sufficiently short for not impeding access to the sickness and unemployment benefits of at least 26 and 13 weeks respectively.
Part XIII (Common provisions), Article 71(3). General responsibility of the State for the due provision of benefits. In 2010, the general rollback of the level of social protection in the country accompanied by unprecedented public spending on the bail out of the banks, which have succumbed to the pressure of the financial markets, led the Committee to ask the Government, in its conclusion on the European Code of Social Security, how it understood the general responsibility of the State for the proper governance of social security and what measures it took to protect funds for the social protection of the population against external political and financial pressures. The Committee thanks the Government for the detailed, thoughtful and frank reply provided in its 38th report on the Code. According to the Government, the crisis has impacted in three ways: a collapse in tax revenues which at the end of 2010 were 33 per cent lower than their peak in 2007; a tripling of unemployment in a relatively short period (from 4.5 per cent in June 2007 to 14.2 per cent in June 2011); and severe losses in the banking sector which threatened to destabilize the whole system. Against this background, Ireland has had to take decisive action to stabilize Government finances, to start reducing the structural deficit caused by the contraction in the economy, and to stabilize and recapitalize the banking sector, which is essential to Ireland’s economic recovery. The latter has seen, in accordance with the EU–IMF Programme of Financial Support for Ireland, very significant resources injected into the banking system. At the same time, in order to enhance international credibility, the Government pursues a determined deficit reduction strategy as set out in the National Recovery Plan for the combined period 2011–12. The funding agreement with the EU and IMF commits the Government to a further reduction of “at least €3.6 billion” in Budget 2012. Accordingly, there has been, and will continue to be, an ongoing requirement to curtail expenditure in 2012 and in later years.
The Department of Social Protection is expected to spend in 2011 over €20 billion or almost half of tax and PRSI contributions income combined. For that reason, the transition to a more balanced budgetary position simply cannot be made without affecting social welfare spending. However, when considering the retrenchment which has taken place after 2009, it is as well to remember that over the last number of years the Irish social welfare system has seen unprecedented growth in the level of payments made and the coverage of the population. For instance, in the period from 1997 to 2005 pensions increased by about 80 per cent which was way ahead of inflation during that period. Notwithstanding the social austerity measures, the improvement in the position of welfare recipients achieved during the period of unprecedented growth in social welfare payments has to a large extent been maintained. The consideration of the level of overall expenditure on social welfare in the context of Budget 2012 and subsequent Budgets will be informed by the commitment in the Programme for Government to maintain social welfare rates.
With regard to PRSI spending, the Government explains that, traditionally, the Social Insurance Fund (SIF) has been funded on a tripartite basis – with contributions coming from the Exchequer, employers and employees. Legally, the Exchequer is the residual financier of the SIF, but no Exchequer contribution was required between 1996 and 2009 as the fund was in surplus. Actuarial reviews of the Fund are carried out every five years and the 2005 review (published in 2007) foresaw that any surplus available to the Fund will be exhausted by 2016. However, because of the rapid deterioration in the Irish economy and the huge rise in unemployment, the financial position of the fund deteriorated more quickly than was anticipated and the tripartite funding arrangement is now back in operation. The Government is committed to ensuring that social welfare payments are made at levels which will sustain social cohesion and treat people with dignity and will continue, in these very difficult times, to provide appropriate funding to support the Social Insurance Fund.
The Committee notes the firm commitment of the Irish Government to simultaneously fulfil the triple objective of: (1) recapitalizing the banking system by injecting into it substantial public funds at the expense of increasing the public debt; (2) consolidating the State’s finances for repaying its increased debts by substantially cutting public expenditures, including on the social welfare programmes; and (3) maintaining social welfare payments at appropriate levels in conditions of the growing number of claimants and diminishing resources of the SIF. With respect to recapitalising the banks and restructuring of the banking sector, the Government states that Irish banks will be reduced to a size appropriate to the country’s economy, more focused on core operations and better funded. With respect to consolidation of the State’s finances, the Government pledges to pursue a determined deficit reduction strategy in compliance with the funding agreement with the EU and the IMF. With respect to the commitment to maintain social welfare rates, the Government will provide appropriate funding to support the SIF. The Committee observes that, though these objectives might appear to be contradictory in some respects, it is only through ensuring that financial, economic and social objectives are advanced simultaneously in a balanced and integrated manner that the country could be steered successfully out of the crisis. The Committee hopes that the 2012 Budget proposed by the Government will not shift this balance away from the social objectives by disproportionately reducing the overall expenditure on social welfare, and would like the Government to show it in its next report that it has been able to find a fair balance between social expectations and financial constraints. Please also supply a copy and explain the main findings of the actuarial review of the SIF, which, according to the five year cycle, should have been carried out in 2010.
In the light of these commitments, the Committee notes that the Government is fully conscious of the need to enhance the international credibility of Ireland in the eyes of its international creditors by sticking to the aggregate reductions in social spending set out in the National Recovery Plan for 2011–12, as well as of its general responsibility vis-à-vis the Irish people for maintaining the national social security system at the level which will sustain social cohesion and treat people with dignity. The Committee would like to observe in this respect that the international credibility of Ireland depends not only on the fulfilment of the funding agreement with the EU and the IMF but not least on its ability to safeguard the social rights and protections which make it possible to fulfil the aim of the Council of Europe, as defined in the Preamble to the Code, “to achieve a greater unity between its Members for the purpose, among others, of facilitating their social progress”. Recalling that social progress is measured by the reduction of poverty, the Committee hopes that the Government, in pursuing the objectives of curtailing the deficit, recapitalizing the banks and repaying the debts to its international creditors, will not lose sight of the objective of the social progress and the reduction of poverty, for which Ireland has long been known as one of the most remarkable examples in Europe. The Committee will therefore assess the reduction in the overall level of protection offered by the Irish social welfare system in relation to one of the main objectives of the Code, which consists in the prevention of poverty among the categories of the persons protected. The social welfare system would not fulfil its role if its benefits would push the workers below the poverty line. The Committee asks the Government to provide in its next report the most recent statistics on the dynamics of poverty in the country, including the data on the social welfare minimums in comparison with the poverty line.
Finally, it is worth recalling that, during the economic crisis of the mid 1990s, the Committee have already stressed that immediate financial considerations, however important, should not take precedence over the need to preserve the stability and effectiveness of the social security system, and that any reductions in social security expenditures should be carried out in the framework of a coherent policy aimed at achieving viable long-term solutions ensuring the required level of social protection. The Committee would like the Government to explain in this respect whether reductions in the social welfare programmes in 2011 and 2012 continue to be made on the basis of the possible savings in the social welfare schemes identified in 2009 in extremis by the Special Group of Public Service Numbers and Expenditure Programmes (the McCarthy report) or are now carried out according to a more consistent social policy, which favours long-term solutions over the immediate cuts.

CMNT_TITLE

The Committee took note of the Government’s report and would like to receive additional information on the following points.

Part IV (Unemployment benefit) of the Convention in relation to Article 69. According to the Government’s report, a person may be disqualified from receiving unemployment benefit for a period of up to nine weeks for, inter alia, loss of employment through misconduct, refusal of an offer of suitable employment, failure or neglect to avail of any reasonable opportunity of obtaining suitable employment. The Committee would like the Government to explain the scope of the notions of “misconduct”, “failure or neglect” and “suitable employment”, and to provide guidelines on the practical application of these provisions by the deciding officers.

Part XI (Standards to be complied with by periodical payments). The Committee notes that calculation of the replacement level of benefits has been selected according to Article 66(4)(a) of the Convention. It also notes that the report refers to the maximum weekly rates of the disability and unemployment benefits and the widow’s pension, as well as to the annual earnings ceiling for purposes of the employee’s social insurance contribution. The Committee would like the Government to show in its next report, on the basis of appropriate statistics, that the maximum limits prescribed for the rate of the benefits and for the earnings taken into account for the calculation of the benefits are fixed in such a way as to comply with the provisions of paragraphs 1 and 3 of Article 65 of the Convention.

CMNT_TITLE

Part III (Sickness Benefit), Article 17, and Part IV (Unemployment Benefit), Article 23. The Committee notes the information supplied by the Government concerning the extension of the qualifying period required for entitlement to sickness benefit and unemployment benefit following the adoption of the Social Welfare Act, 1987. It notes in particular that this Act changed the first of the qualifying periods for sickness benefit and unemployment benefit set out in section 19, paragraph 1(a) and section 30, paragraph 1(a) of the Social Welfare (Consolidation) Act, 1981, so that it is now necessary, in order to be entitled to these benefits, to have accumulated qualifying contributions in respect of 39 contribution weeks since the claimant's entry into insurance (whereas 26 contribution weeks were sufficient previously). The Committee would be grateful if the Government would supply detailed information in its next report on the reasons why this extension was made to the qualifying period in view of the provisons of Articles 17 and 23 of the Convention.

© Copyright and permissions 1996-2024 International Labour Organization (ILO) | Privacy policy | Disclaimer