Oireachtas Joint and Select Committees

Thursday, 17 November 2022

Public Accounts Committee

Business of Committee

9:30 am

Mr. Seamus McCarthy:

I think it was specifically regarding the chapter on the classification of workers for PRSI purposes, which, obviously, is connected to the Social Insurance Fund. The chapter, I hope, is relatively clear. As for the key points that come out of it, we make a number of recommendations and the Department of Social Protection agrees in part with each of them and sets out its position.

What we found was that revised guidance for determining employment status was published in July 2021. It is more comprehensive than the guidance that had been published previously. We found that approximately 14% of workers are classified as self-employed. What is interesting is that the value of PRSI receipts from those who are classified as self-employed has increased significantly in recent years, but the number of PRSI contributors has increased by far less. That means that the average contribution from those in self-employment has increased, which is possibly an indication of higher earnings for those individuals. It may be of interest to the committee to explore what is behind that.

We found there was no reliable estimate of the level of misclassification of employment status. There are some data from Revenue, but those data are from targeted investigations so one cannot generalise from them. However, even in that situation, where they looked at the construction sector, it suggested that misclassification was not that widespread in the sector. Undeclared employees was possibly a greater concern there. We also found that a review of scope section decisions showed that there had been case-by-case determination of the cases. We also found that while there was a determination by the Department to increase the resources to examine classification cases, the provision of the staffing had been slower than expected and it has not yet ramped up to the level the Department expects.

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