Statutory sick pay could form part of social welfare system reform, says Burton

THE GOVERNMENT was considering the introduction of statutory sick pay in the run-up to the budget, Minister for Social Protection Joan Burton told the Dáil.

She said it was the norm in most EU member states. “The extent to which employers are liable varies significantly, with two years in the Netherlands, 28 weeks in the UK and north of the Border, and nine days in Finland,” she added.

It was one of a range of options being examined with a view to reforming the social welfare system to bring it into line with practices in other countries.

They include addressing the deficit in the social insurance fund and meeting the commitments into which the previous government entered with the EU, the International Monetary Fund and European Central Bank to achieve substantial reductions in current spending.

Ms Burton said she was conscious of the pressures many employers faced, particularly in the small and medium enterprise sector, and any scheme would seek to take account of those concerns to the greatest extent possible.

Some of the employers’ concerns were outlined to her at a meeting with the Irish Business and Employers’ Confederation (Ibec) last week, she said.

Last year, her department had paid more than €2.8 billion relating to illness and disability to almost 250,000 beneficiaries, she said. This contrasted with 2001, when €1.1 billion was paid to fewer than 174,000 beneficiaries.

Fianna Fáil spokesman on social expenditure Barry Cowen said businesses would be facing a VAT increase of 2 per cent on top of commercial rates in a context of reduced turnover and retail spending. This would be a further imposition on employers and seemed to be anti-jobs, he added.

The proposal would in effect amount to a sick leave tax on businesses, in direct contrast to Government rhetoric on job creation.

Ms Burton said all Ireland’s competitors, including countries with good social protection systems, had followed the Organisation for Economic Co-operation and Development’s advice to develop statutory sick pay schemes, whereby the first several days were taken care of by the employee, after which the employer stepped in and, after a period, the State.

Introducing the scheme, she said, would require legislation and further consultation with trade unions and employers.

She regretted the opportunity was not taken during the boom years to build a structure of contributions from employees that would offer the kind of social protections to which most people aspired.