Joan Burton (Dublin West, Labour) | Oireachtas source

I thank Deputy Butler for raising the issue of providing social protection for the self-employed, which he has raised on many occasions in this House because it is a very important issue for the hundreds of thousands of self-employed people in the country.

Self-employed persons are liable for PRSI at the class S rate of 4%, which entitles them to access long-term benefits such as State pension, contributory, and widow's, widower's or surviving civil partner's pension, contributory, and maternity benefit. 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.

In 2011, I established the advisory group on tax and social welfare to meet the commitment made in the programme for Government. The advisory group is examining and reporting on issues involved in providing social insurance cover for self-employed persons in order to establish whether or not such cover is technically feasible and financially sustainable. Any proposals for change in the social welfare system must be financially sustainable and cost neutral.

On 6 September 2013, I published the group's report on the issues involved in providing social insurance cover for self-employed persons. The group found that the current system of means-tested jobseeker's allowance payments adequately provides cover to self-employed people for the risks associated with unemployment. I thank Deputy Butler for acknowledging the changes we have made in respect of self-employed people and farmers, who for the most part are self-employed and who can catastrophically lose their business. It used to be that they had to use the previous year's accounts. We now take current up to date evidence of what has happened to them. The group found that 80% of self-employed people have access to jobseeker's benefit. Consequently, the group was not convinced that there was a need for the extension of social insurance for the self-employed to provide cover for jobseeker's benefit.

The group found that extending social insurance for the self-employed was warranted in cases related to long-term sickness or injuries. To this end, the group recommended that class S benefits should be extended to provide cover for people who are permanently incapable of work because of a long-term illness or incapacity through the invalidity pension and the partial capacity benefit schemes. The group further recommended that the extension of social insurance in this regard should be on a compulsory basis and that the rate of contribution for class S should be increased by at least 1.5 percentage points.

In the course of its deliberations, the group identified a range of issues associated with the subject of social insurance for the self-employed that should be addressed, and made a number of recommendations in this regard. These include, among others, the means assessment for self-employed income in terms of accessing jobseeker's allowance payments, credited PRSI contributions, self-employed access to activation and training schemes and the role that information campaigns might play in addressing information deficits, particularly with regard to entitlements to jobseeker's allowance, as we have just discussed them.

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