Ms Josephine Feehily:

The question for me related to class K PRSI. By way of general remark, this is not the commission’s business. PRSI needs streamlining and that is a different question.

The range of solutions in our recommendations in the commission’s report around PRSI and older people would bring some complexity and the Chairman is completely correct on that. We are recommending that those who wish to keep contributing would pay a full contribution up to age 70 if they wanted to increase their pension. We are also recommending that if they do not have enough contributions they would keep paying and then they would stop when they had enough. That would involve another subclass A, where A is already broken down into people with an income below €300, or whatever the exact figure is. There are subdivisions in class A and there would now be a new one.

The separate recommendation is about funding. This is simply a solidarity contribution where pay is the most convenient box to put that into because it exists already as a solidarity contribution in the PRSI system. The Chairman is correct in saying that we would be introducing some complexity. The alternative is to simplify everything into a single rate. It is not unusual in the history of PRSI, going back to 1979, for there to be these complexities. In fact, in preparing as part of the commission’s work, I discovered class P, which I had never heard of, which has all of about seven people in it. It is not unusual within the PRSI system for it to provide subclasses to address particular issues. We acknowledged that the complexity was already there and we may add a little bit to it but not an enormous amount.

If we could use the flexible options, in particular, for people to continue paying in order to enhance their pension or to fill out their record, we thought that it was worth the complexity. The class K piece is a straightforward funding hypothecated tax, almost.

Ms Burke will talk about the modelling in a moment but there are sections in the report about labour market interventions. Childcare is not one of them but some of the other labour market interventions are set out there, including Government policy on the labour market generally. We were mindful of it and I will allow Ms Burke to answer whether we were able to capture childcare.