Éamon Ó Cuív (Galway West, Fianna Fail)

Self-employed people pay PRSI class S contributions which provide cover for long-term benefits such as State pension, contributory, and widows-widowers pension, contributory. 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 jobseekers and illness benefits. In 2008 there were 338,187 persons in PRSI class S. In general, contributors get good value for money by paying for social insurance contributions. PRSI coverage is related to the risks associated with employment or self-employment, the annualised system of contributions for self-employed people and the practicalities of administering and controlling access to short-term payments for self-employed people. Self-employed people pay class S contributions at a rate of 3% per annum, a much lower rate compared to the 14.75% full class A contributions paid by employees and their employers, and this is reflected in 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.

In this context it may be noted that self-employed workers generally achieve better value for money by paying social insurance compared to employees. The 2005 actuarial review of the social insurance fund found that a male, married, self-employed contributor earning gross average industrial wages had a value for money index of 10.3 compared to an index of 3.1 for an equivalent employee.

In basic terms this means that, with regard to benefits, the self-employed contributor can expect to receive over ten times what he contributes to the social insurance fund compared to the employee who only gets three times what he and his employer contribute despite the fact that the range of benefits available to employees is greater.

There are no plans at present 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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