Peter Burke (Longford-Westmeath, Fine Gael)
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Decisions in relation to Pay Related Social Insurance (PRSI) are primarily a matter for the Minister for Social Protection.

The sustainability of State Pension and social insurance schemes is an issue for many advanced economies. The increase in social security contributions set out in the Roadmap of Increases to Pay Related Social Insurance from 2024 to 2028 will improve the sustainability of social insurance in Ireland, and help avoid any shortfall in the Social Insurance Fund.

Ultimately, the sustainable funding of social insurance benefits related to pensions; illness, disability and unemployment payments; and maternity and bereavement leave, is critical to improved social and working conditions in Ireland. As such, the increase in PRSI, which does have an impact in terms of take-home pay, is consistent with the objective of improving working conditions for employees in Ireland.

While there is a risk that some employers may seek to structure their staff working hours in order to keep more employees below the upper-rate threshold for Employer PRSI, this risk has not materially changed in recent years and is a feature of a system with multiple rates. This risk is mainly concentrated in those sectors with lower rates of pay, such as those with a higher proportion of minimum wage employees - as identified in the report An Assessment of the Cumulative Impact of Proposed Measures to Improve Working Conditions in Ireland published by the Department of Enterprise, Trade and Employment and the Department of Social Protection early this year.

The Low Pay Commission 2023 report on ‘Recommendations for the National Wage’ set out that 28% of those in the accommodation and food services activities sector, and 16.2% of those in the wholesale and retail trade sector, are on the minimum wage. However, it should be noted that this risk assessment is based solely on the prevailing rates of pay in those sectors, rather than an assessment of the risk of particular action by any single employer.

As part of the SME Package in May 2024, it was confirmed that the Minister for Social Protection will increase the Employer PRSI threshold from €441 to €496 with effect from 1 October 2024. This will ensure that employers with employees working full-time on the national minimum wage will not be required to pay the higher rate of employer PRSI of 11.05% (and will instead pay the lower rate of 8.8%). This will reduce the risk of the type identified by the Deputy.