Joan Burton (Dublin West, Labour)

I thank Deputy Penrose for raising this important issue which is critical for the people, families and communities affected by the loss of employment by so many self-employed people. Not only did these people employ themselves and their families, but they employed many others, particularly in the construction area and allied sectors.

Self-employed persons are liable for PRSI at the Class S rate of 4%, which entitles them to access long-term benefits such as the State pension, contributory, and widow's, widower's or surviving civil partner's pension, contributory. Ordinary employees who have access to the full range of social insurance benefits pay Class A PRSI at the rate of 4%. In addition, their employers make a PRSI contribution of 10.75% in respect of their employees, resulting in the payment of a combined 14.75% rate per employee under full-rate PRSI Class A. For employees earning less than €356 per week, the rate of employee's PRSI is 4.25%

Any changes to the PRSI system to extend the full range of social insurance benefits, including jobseeker's benefit, to self-employed persons would have significant financial implications and would have to be considered in the context of a much more significant rise in the rate of contribution payable.

I established the advisory group on tax and social welfare last year to meet the commitment made in the programme for Government. The advisory group will, inter alia, examine and report on issues involved in providing social insurance cover for self-employed persons in order to establish whether such cover is technically feasible and financially sustainable. In addition, the actuarial review of the social insurance fund, which is due to be completed in mid-2012, will examine this matter. Obviously, since the crash, the social insurance fund has gone into significant deficit and that is part of our problem and we must find a way to get the social insurance fund to grow so we can meet all the requirements on the fund.

Self-employed workers may establish eligibility to assistance-based payments such as jobseeker's allowance. They 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. In general, their means will take account of the level of earnings in the past 12 months in determining their expected income for the following year and, in the current climate, account is taken of the downward trend in the economy. As in the case of a non-self-employed unemployed claimant of jobseeker's allowance, the means of the person's husband, wife, civil partner or cohabitant will be taken into account in deciding on entitlement to a payment.

I share the Deputy's memory of the snow last year and of the distress of families that found themselves in the unfortunate position described so eloquently by Deputy Penrose.

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