Mary Hanafin (Dún Laoghaire, Fianna Fail)

The combined employee and employer social insurance contribution for general employees, paying class A PRSI, is 14.05%, excluding levies. Self-employed people, on the other hand, are only liable for PRSI at the class S rate of 3%. These much lower contributions give coverage towards long-term benefits such as State and widow's pension but do not enable a person to qualify for short-term insurance payments such as illness benefit or jobseeker's benefit.

A system of separate arrangements for employed and self-employed workers within a social insurance context is common in other European social protection systems. Self-employed people can apply for the means-tested jobseeker's allowance if their business ceases or if they are on low income as a result of a downturn in demand for their services.

Their means would be taken as any net profit that they will earn in the coming 12 months. While their income from the previous 12 months is used as an indication in estimating their likely future earnings, it is not simply assumed that the previous year's earnings will be received in the coming year. Instead, account is taken of the potential for significant upward or downward variations in income from one year to the next.

For example, if a self-employed person lost a contract and was unlikely to find a substitute contract in the coming year, this would be factored into the assessment of future income. The implications of the present downturn in the economy are of course taken into account.

If a self-employed person's situation changes after they have made an initial claim for jobseeker's allowance, they can apply to have their means reviewed in the light of their changed circumstances. In addition, it is open to the individual, if he or she is dissatisfied with the means assessed, to appeal to the social welfare appeals office.

I appreciate the difficulties currently being faced by many self-employed people. However, extending social insurance cover for short-term benefits to this group would have significant financial implications and would have to be considered within a budgetary context.

Consideration would also have to be given to an appropriate increase in the rate of the PRSI class S contribution. In that context, the Government has no immediate plans to change the current arrangements. Instead, we will continue to ensure the mechanisms used for assessing means for jobseeker's allowance are sufficiently adaptable to meet the challenges presented by the current economic situation.

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