Budget 2017 delivers a range of small benefits across the workforce and society, but lacks a vision for our employment and economic direction, particularly in the uncertainty of Brexit.
There are a number of direct benefits which will benefit many employees.
Universal Social Charge
This has reduced by 0.5% for the lower three rates of USC (from 1% to 0.5%, from 3% to 2.5% and from 5.5% to 5%) for all employees’ earnings up to €70,000.
Social Welfare Payments
The €5 a week increase in social welfare payments will extend to those on illness benefit, maternity and paternity benefit, as well as certain jobseekers. This will provide extra State-funded money for employees when out of work. It will also have the effect of providing a higher level of State funding where employers provide top-up payments. This will result in a small saving in top-up payments around illness, maternity, paternity and adoptive leave, giving, for example, a €130 saving where a woman receives maternity top-up benefit for 26 weeks.
Public sector employees will benefit from the reduction in the pension levy, but this and the lack of any other pension measures fail to address the alarming growing and pension deficit problem in Ireland.
The 10c an hour increase in the minimum wage will benefit a small number of employees, but social welfare supports for those on low income were not addressed.
Dental and Optical Benefits
The Social Protection website references increases to dental and optical benefit for all insured employees from October, but details have yet to be provided. When details emerge, it will be beneficial to inform employees to increase uptake of such benefits.
The increased investment in education is welcome, with an extra 2,400 teachers along with extra funding for higher education. A consultation process on an Exchequer-Employer investment mechanism for third level funding may be worthwhile, but does not detract from the need for increased State funding in the third level sector, to support the growth of our economy.
CIPD welcome additional childcare support for parents, but this must be accessible and equitably delivered.
Additional taxation measures for self-employed and entrepreneurs helps to recognise their contribution to the Irish economy.
Minister Noonan announced the establishment of a Public Service Pay Commission, but it is critical that any public pay restoration must be carefully managed and in a way that is affordable for all. A new, SME-focussed, share-based incentive scheme is to be welcomed, but must be equitable and achieve clear benefits for companies and employees.
Many interventions labelled under Brexit are not new, as they were already in the pipeline. The support to attract and grew business to Ireland is welcome, but we do not believe the housing initiatives will overcome the current immediate crisis. While Brexit is likely to present an opportunity to attract more jobs to Ireland, feedback to CIPD from the HR profession, especially in multinational organisations, is highlighting the current negative effect of the housing crisis on their ability to attract people to live and work in Ireland. We call on the Government to take urgent action to address the personal, social and economic damage that the housing crisis is causing in Ireland and to our international reputation.