The Unite trade union has urged the Government not to reduce employers' PRSI to compensate for a planned increase in the national minimum wage.

Unite's Ireland secretary Jimmy Kelly said employers here already paid the lowest social insurance in Europe.

He said Unite had consistently argued that employers’ PRSI should be raised to finance a “social wage”– which he described as the kind of social insurance-based services that workers in the rest of Europe took for granted.

Ministers on Tuesday signalled that reforms to PRSI would form part of a package to be introduced in the budget in October which would see the national minimum wage raised by 50 cent to €9.15 an hour.

Low-paying boss

However, Unite said “arguing that employers’ PRSI should be reduced to fund this minimalist increase in the minimum wage is akin to robbing Peter to subsidise his low-paying boss.

“We already subsidise low-pay employers through family income supplement, part-time unemployment payments and lost tax revenue.

“Piling on another subsidy is not the way to address the scourge of low pay,” Mr Kelly said.

The Low Pay Commission, which proposed a 50 cent rise in the national minimum wage, in a report on Tuesday pointed to anomalies in the PRSI system which could see workers actually take home less money and employers having to pay significantly more in social insurance contributions if an increase brought salary levels above certain thresholds.

Quite stark

Taoiseach

Enda Kenny

said the examples set out in the report on the PRSI anomalies were “quite stark”.

Tánaiste Joan Burton said that PRSI anomalies arising from the recommendations in the Low Pay Commission report would be addressed in the budget.

In its submission to the Low Pay Commission, Unite had called for the national minimum wage to be increased by €1 an hour.