Pat Breen (Clare, Fine Gael) | Oireachtas source

I do not propose to accept the amendment. In addition to the PRSI paid by employees, PRSI is payable by employers on the basis of the salary paid to their employees. Most employments fall under PRSI class A. The rate of employer PRSI under class A is 8.5% where weekly earnings are €376 or less and 10.75% where weekly earnings exceed €376.

It is generally recognised that the rate of employer PRSI payable is lower in Ireland than any other EU countries. Ireland is the 11th lowest in the list of OECD countries for employer social security contributions, while employee contributions are the sixth lowest. However, it is important to note that in many countries there is either a cap on employer social security costs or a reduced rate above a certain income threshold. In Ireland, a flat rate is charged on the full salary. In these cases, direct comparisons of rates would not provide a realistic basis for assessing the effective rate of employer contribution.

Consideration of increasing the rate of PRSI charged to employers is part of the larger debate on policy development of social insurance in the years ahead. The findings in the recently-published Actuarial Review of the Social Insurance Fund at the end of 2015 will serve as an important input to the debate. As the Minister for Employment Affairs and Social Protection, Deputy Doherty, indicated at the time of its publication, the review provides Government with an evidence-based and timely opportunity to consider reform of how our social insurance system is financed. The Minister also stated that she intended to consult widely on these reform options. In light of the Minister's intention to undertake a review of our entire system of social insurance, it would not be appropriate to consider changes in only one aspect of social insurance, that is, the rate of contribution paid by employers, in isolation. That would not amount to good practice. A commitment to increase the rate of employer PRSI would be premature given the requirement to take a broader perspective on changes to social insurance.

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