Social protection income cut-off points a deterrent for returning to work, group says

Some people choose not to accept work in the hospitality and tourism sector because of tax and social protection income cut-off points, a representative organisation for small businesses has said.

On Friday, Fáilte Ireland published a report that found that close to 90 per cent of businesses in the hospitality and tourism sector are still finding it hard to recruit staff.

According to the study, more than 71 per cent of hospitality businesses who are recruiting have increased pay in a bid to attract staff, while nearly two-thirds are guaranteeing staff “predictability” about their working hours.

Neil McDonnell, chief executive of Isme, the Irish Small and Medium Enterprise association, said staff shortages are prevalent “across the board” in services and manufacturing, with every area reporting “some difficulty”.

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Mr McDonnell said while hours and pay are contributing elements behind the staff shortages, the “real difficulty” is the impact of tax and social protection income cut-off points.

“What is especially an issue for single parents, and single women with children, is the penalties for entering the workforce are so significant that an awful lot of them don’t want to do it,” he said.

Mr McDonnell said the income limits for social and affordable housing means it is not financially viable for many single parents to return to work, as they could be deemed ineligible for certain schemes.

“What you find is in the regions, local authority limits social housing in band three [for people with general housing needs], a single person earning more than €25,000 a year loses entitlements. That’s a very significant loss to make. That raises to €35,000 in the cities,” he said.

[ Hospitality and tourism sector still struggling to recruit staff, research shows ]

[ Where have Ireland’s hotel and restaurant staff gone? ]

“You can also lose things like medical card entitlement, fuel allowance, all of those things. There are a whole load of bolt-ons that are lost once you exceed certain income levels.”

The availability of accommodation is also adding to the issue, he said, with many prospective employees being unable to relocate for work due to having nowhere to live.

Meanwhile, Siptu trade union said hospitality and tourism workers are “living on the bread line” and struggling to “scrape by” due to the wages paid in the sector.

Denis Hynes, Siptu organiser for hospitality, said there are “multiple issues” that are resulting in people no longer wanting to work in the industry.

“Most people are on the minimum wage, which is a poverty wage. If you’re in college or third level, you can scrape by on that because you probably have family help. But if you’re someone who wants to make a career in the sector, you can’t get by on that,” he said.

“Workers are telling me that getting a tea break is a problem. Some people are only finding out on a Friday that they’re in work on a Saturday.”

He added: “The industry is in real trouble, because if they don’t fix this and encourage more people to work, you will see hotels closing.”

The union has called for all hospitality and retail workers to earn at least the living wage.

The living wage in Ireland is €12.90 per hour, according to a group of researchers, academics and social justice groups, known as the Living Wage Technical Group. This is €2.40 higher than the national minimum wage, which stands at €10.50 per hour.

Tom Fitzgerald, regional co-ordinating officer with the trade union Unite, said hospitality workers “often struggle to survive on precarious and low-hour contracts”.

“In addition, Unite’s own research, as well as research conducted by Dr Deirdre Curran of NUIG, has found that hospitality workers are exposed to a range of abuses from harassment to denial of legally mandated rest breaks,” he said.

Adrian Cummins, chief executive of the Restaurants Association of Ireland, said 40,000 workers left the sector during the Covid-19 pandemic because it was closed down for such a prolonged period.

He said there was a need to host a recruitment drive to increase the number of non-EU workers in Ireland, many of whom returned home during the public health emergency.