Fragmented budget heralds introduction of new parent's leave

Against the backdrop of Brexit, housing and the environment, Minister for Finance and Public Expenditure and Reform, Paschal Donohoe T.D., delivered a range of changes in Budget 2020.

Below we highlight the key updates affecting work and working lives.

Brexit

Overall the Minister set Budget 2020 in the context of protecting the economy in the face of Brexit. The cost of supporting the economy in the event of a No Deal Brexit will mean a slower pace of growth, with the Minister forecasting 0.7% economic growth next year, down from 5.5% projected for this year. 

Numerous supports amounting to a package of over €1.2 billion, excluding EU funding, were announced to mitigate the risks, though the variety of schemes will be confusing for those attempting to draw down these supports. The Minister still expects an additional 19,000 new jobs to be created next year.

New parent's leave and benefit

The CIPD welcomes the allocation of €22 million in the Budget to cover a new Parents Benefit in 2020. This will provide payment to cover two weeks leave for up to 45,000 parents under the newly announced Parent’s Leave and Benefits Bill. The recently published Bill sets out to provide parents of children born or adopted from 1 November 2019 with up to two weeks paid leave to be taken before the child is one years of age. This scheme, which will operate like an extension of maternity and paternity leave, will require six weeks’ notice and replace the confusing proposals around paid parental leave.

The Government announced this as prioritising families and that a potential estimated 60,000 parents could benefit. As this new leave is most likely to be taken immediately after maternity or paternity leave, we recommend employers consider their current policy when they assess any decision on potential salary top-up payments.

Working families

CIPD Ireland also welcomes the financial measures, though small, to support working families and carers, but unfortunately affordable child care or increased flexible working were not tackled. Increases in qualified child payments, the One Parent Family Payment Income Disregard and the Working Family Payment Disregard are good to see. The increase in the hours that carers can work or study outside the home, from 15 hours to 18.5 hours per week, is a positive move.

Director of CIPD Ireland Mary Connaughton says: The financial measures aimed at supporting working families and carers are needed, but it’s also important these are matched by supports to increase workplace flexibility. We would like to have seen the Minister recognise the evidence that flexible working can contribute to improved productivity, and how a reduction in commuting could be part of how we grow the economy while reducing our environmental impact.

Sustainability and flexibility

With climate change in the spotlight, one key measure to address the climate agenda is the increase in carbon tax. This will directly impact on motorists and haulage costs immediately, and in May 2020 will be applied to home heating bills.

The Minister acknowledged the opportunity for public sector employees to commute less. With 335,000 people currently working in the public sector, there is a real opportunity to capitalise on all the research surrounding the pressures of working lives. The CIPD HR practices in Ireland 2019 survey found reducing commuting time and costs, and giving people more control over their work were central to the advantages of new working arrangements. Giving people the opportunity to commute less and thereby save time and money would be a positive move.

While the proposed review of future workforce and office requirements for the Civil Service announced by the Minister is a first step, this should be extended to cover more than just the Civil Service.

Housing

An extra €80m is being targeted towards the Housing Assistance Payment scheme for 2020, and the Help to Buy scheme has been extended.

Mary Connaughton says: It’s important to take steps to address the housing problems, considering the knock-on effect that shortages are having on individuals, families and the labour market.

Innovation and upskilling

Under initiatives by the Department of Business, Enterprise and Innovation, additional funding will be available for co-funding projects involving enterprises and research partners in 2020. Taxation measures under the Employment and Investment Incentive and the R&D tax credits scheme are planned to support smaller companies to improve innovation and productivity. The Minister also announced increased flexibility in the operation of the Key Employee Engagement Programme, particularly allowing for part time and family friendly working. 

An increase of 0.1% in the National Training Fund levy will be used to support reskilling and lifelong learning with a particular focus on the sectoral and regional impact of Brexit. The additional €60 million Human Capital Initiative will contribute to priority skills training and driving reform and innovation in the higher education system. With the shelf-life of skills getting shorter and shorter, the CIPD calls for more agile approaches to education, reskilling and upskilling.

Top