Joan Burton (Dublin West, Labour) | Oireachtas source

The self-employed pay PRSI at the class S rate of 4%. These contributions provide cover for long-term social insurance benefits including the State pension (contributory) and the widow’s, widower’s or surviving civil partner’s contributory pension. In contrast, a combined employer and employee PRSI rate of 14.75% is paid in respect of most employees, who can then access the full range of social insurance benefits.

The most recent actuarial review of the social insurance fund published in 2012 found that, in the case of the self-employed with earnings equivalent to national average earnings, a 15% contribution rate would be needed to provide the core full-rate State pension (contributory) to the self-employed. This compares very favourably with the 4% rate currently paid by the self-employed. The review also showed that the self-employed at all income levels got better value for money for their contributions in regard to the State pension than employees generally.

In its 2013 report, the advisory group on tax and social welfare found that almost nine out of every ten self-employed people who claimed the means tested jobseeker’s allowance during the three-year period from 2009 to 2011 received payment. Therefore, it 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.

However, the group found that extending social insurance for the self-employed was warranted in cases related to long term sickness or injuries, through the invalidity pension and the partial capacity benefit schemes. In this regard the group recommended that the rate of contribution for class S should be increased by at least 1.5 percentage points, payable on a compulsory basis only.

While I am anxious to expand the level of social insurance entitlement for people who are self-employed - there are many such people and the number is growing - any such change would have to be funded by an appropriate level of contribution.

See this speech in context