Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

The report which was published attempts on page 18 to provide an analysis with regard to the potential loss to the Exchequer. It looks at it for different income levels per worker and seeks to work out the potential loss in revenue to the State. Its conclusion states these data indicate that the potential loss to the Exchequer for a person engaged in work at a rate equivalent to the average industrial wage of €37,500 amounts to €5,000 per annum under self-employment, rising to €8,000 per annum at a payment level of €60,000, and that these losses are in the range of 30% to 45% of social insurance contributions. The report provides that information on an individual level. Aggregating that information to a total level is where the difficulty is.

If the Department was aware of this as an issue through its compliance efforts, it would intervene, thereby reducing the loss to the Exchequer. The view of the Department of Employment Affairs and Social Protection is that this issue is not occurring on the scale that I think the Deputy believes it is. The report goes on to try to estimate the number of people who may be involved in intermediary arrangements.

The report reads:

Estimates by Revenue suggest that the number of people employed under PSC and MSC arrangements is of the order of 15,000, with average annual receipts per contractor of €60,000. If the relationship between the end user and say 50% of the individuals involved is effectively in the nature of a contract of service, and if the PAYE system was applied by the end user, the estimated gain to the Exchequer would be of the order of €60 million per annum. If the figure was 25%, the estimated gain to the Exchequer would be of the order of €30 million per annum.

These are a range of outcomes that depend on a level of activity. It is the Department's view that the level of non-compliance is significantly lower than the Deputy believes it to be.