Employers facing weekly sick pay cost of €188

Employers could be forced to pay €188 a week per worker for up to four weeks under plans to make them shoulder some of the cost of illness benefit.

Social Protection Minister Joan Burton said that she expected to introduce proposals to reform sick pay in the next budget.

She met trade unions, business groups and doctors in Dublin yesterday to discuss how employers would carry some of the cost of illness benefit.

Both the Small Firms Association (SFA) and employers’ group IBEC later criticised the Government’s sick pay proposals.

The SFA said it amounted to an additional flat tax on employment that all businesses would have to pay regardless of their profitability and was completely unacceptable.

IBEC said that any move to heap massive additional costs for sick leave pay onto employers was at odds with the Government’s Action Plan for Jobs, as it would put struggling firms out of business and cost jobs.

According to the Department of Social Protection, the State currently pays €876m a year on illness benefit and other disability payments.

Over the past 11 years there has been a 40% increase in the number of payments made — from 173,000 to about 242,000.

The minister pointed out that in most other EU countries employers carried a responsibility for some of the cost of sick pay.

Ms Burton said the introduction of statutory sick pay would help plug the hole in the social insurance fund that amounted to €1.5bn last year — a deficit that could not go unaddressed.

“The simple choice facing the Government is to increase PRSI rates, reduce benefits or introduce statutory sick pay,” she said.

The State could make savings of €23m if statutory sick pay were payable for one week; €52m for two weeks, €73m for three weeks and €89m if it was payable over four weeks.

Ms Burton said she wanted doctors to issue certificates stating a patient’s fitness level, as was the case in other countries in the Organisation of Economic Co-operation and Development (OECD).

She believes the move will stem the flow of people from sick leave to long-term disability benefit and ensure that people return to work as quickly as possible.

OECD director of employment, labour and social affairs, John Martin, described the drift of more younger people from sick leave into the disability system, a development that was not unique to Ireland, as a major worry.