Wednesday 17 January 2018

Minimum wage is increased by 50c in a bid to 'make work pay'

Jobs Minister Richard Bruton and Employment Minister Ged Nash sign the Minimum Wage into law yesterday. Photo Sam Boal
Jobs Minister Richard Bruton and Employment Minister Ged Nash sign the Minimum Wage into law yesterday. Photo Sam Boal

Philip Ryan and  Daniel McConnell

The Government pledged to increase the minimum wage by 50c as part of a range of new measures aimed at "making work pay".

Along with the wage hike for the lowest paid workers, PRSI credits will be introduced which will increase their net pay.

More low-income families will be able to avail of the family income supplement under plans announced in the Budget.

The support is a weekly tax-free payment available to lower paid employees with children which gives extra financial support.

It is also hoped the range of measures unveiled in the Coalition's highly anticipated childcare package will encourage stay-at-home mothers into the workforce.

In his Budget speech, Finance Minister Michael Noonan said it was "critical that work pays for every family".

"The Taoiseach has set a key objective for the years ahead of ensuring that every family is better off in employment," Mr Noonan said.

"However, we must strike the right balance between rewarding work for the very lowest paid and keeping the tax base as broad as possible."

He said the barriers to taking up employment were taxation, wage levels for the low paid, and childcare costs.

The said childcare in particular would have a "negative impact" on female participation in the workforce.

Public Expenditure Minister said that one of the Government's first acts when it was elected into power was reversing the "unnecessary and cruel" €1 per hour cut that had been imposed on the minimum wage.

Mr Brendan Howlin said the Low Pay Commission recommended that the minimum wage be increased further, by 50c to over €9.15 per hour, and this will come into place from January 1 next year.

"This means that under this Government the minimum wage has been increased by nearly 20pc. This Government is committed to making work pay," Mr Howlin said.

He said that the best weapons against inequality were "not social welfare but decent jobs and fair wages".

The Coalition pledged to have more people working by the end of the decade than ever before as a major focus was again put on jobs in the Budget speeches.

Mr Noonan said that there would be 48,000 net new jobs next year.

Meanwhile, public sector staff will receive €2,000 in increased earnings in three phases between January 2016 and September 2017.

Mr Howlin last night paid tribute to the sacrifices made by State employees during the crisis.


He said the cuts to their pay were done during a financial emergency, and he said that the emergency had come to an end and therefore it was appropriate to restore pay levels.

"An orderly unwinding of the financial emergency legislation which reduces pay is the prudent and correct thing to do," Mr Howlin said.

He added: "As economic growth returns and private sector wages increase, it is only right that our nurses, gardaí and teachers see their take-home pay improve."

Under the terms of the Lansdowne Road Agreement signed earlier in the year, public sector workers will see their pay restored through a combination of flat-rate adjustments to the public service pension levy and a partial reversal of pay cuts introduced in 2010.

A €1,000 pay increase scheduled for 2017 will only apply to those earning less than €65,000.

Public servants earning more than €100,000 a year will have cuts imposed under the 2013 Haddington Road agreement restored over three phases, beginning in 2017.

Most retired public service staff will receive about €1,680 more in their pensions over the next three years as part of a parallel pension restoration initiative.

Irish Independent

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