Éamon Ó Cuív (Galway West, Fianna Fail)

Self-employed persons pay PRSI Class S contributions which provide cover for long-term benefits such as State pension and widows/widowers pension. Employees are covered by PRSI classes A, E, H and P, which provide cover for the above benefits as well as for short-term contingencies such as jobseeker's and illness benefits.

PRSI coverage is related to the risks associated with employment or self-employment, the annualised system of contributions for self-employed persons and the practicalities of administering and controlling access to short-term payments. Self-employed persons pay class S contributions at a rate of 3% per annum as compared to the 14.75% full class A contributions paid by employees and their employers, to reflect the narrower range of benefits they receive. A system of separate arrangements for employed and self-employed workers within a social insurance context is common in other European social protection systems.

A self-employed person who has paid insufficient class A contributions may instead qualify for jobseeker's allowance. Jobseeker's allowance is a means-tested payment and, in assessing a person's means, account is taken of all income which the person may reasonably expect to receive during the succeeding year. In general, the person's means will take account of the level of earnings in the last 12 months in determining the person's expected income for the following year. In the current climate account is taken of the downward trend in the economy and it is accepted that future earnings may be lower than those of previous years. The process also recognises the potential for significant upward or downward variations in income from one year to the next.

There are no plans to extend cover for short-term benefits to this group of insured workers. Any such measure 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.

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