Regina Doherty (Meath East, Fine Gael) | Oireachtas source

The new scheme for self-employed persons, which I announced as part of the budget last year, will extend social insurance contribution-based benefits to those who are self-employed in circumstances where they become unemployed. This measure is only part of the Government's stated aim of creating what should be a supportive environment for entrepreneurship, including providing an income safety net to both employees and self-employed persons. The scheme will be introduced in November 2019. It builds on other significant improvements for self-employed persons in recent years, such as giving people access to invalidity pension and treatment benefits from 2017, both of which have been highly successful.

Many of the features of the existing jobseeker's benefit scheme will apply to the new scheme, such as its duration and rate of payment. Applicants will have to satisfy the qualifying conditions for the new scheme, including PRSI requirements. The statutory conditions for the scheme are being finalised by officials at this time as part of the legislative process.

The Deputy asked about the rates of PRSI. Self-employed persons pay a personal rate of social insurance that is exactly the same as that paid by people who are employed. There is, however, no equivalent to the employer contribution paid in respect of people in normal paid employment. The question, therefore, is whether a self-employed person, for example, a painter, electrician or carpenter, should, in addition to having to pay the personal rate, also pay the employer rate. My view is that introducing an additional charge of approximately 10% on self-employed persons is not a decision that anyone should take lightly. I am minded that most self-employed persons are not rolling in money. They are not high earners. Most only earn in or around the average industrial wage and are involved in trades or personal services, such as taxi services. On the other hand, I am also minded that the differential in contribution rates can give rise to unwelcome behaviours. Such behaviours were highlighted in the conversation we had about bogus self-employment. Therefore, while I have no immediate plans to apply an employer contribution to self-employed earnings, I am genuinely open to suggestions and to reflecting on how some other European countries and Canadian provinces have addressed this issue.

The question of how best to fund the Social Insurance Fund will be raised in a consultation paper. This issue will become more pertinent as the years go by. We know that if we do nothing, the Social Insurance Fund will run into trouble in the coming years. At the back of my mind is a contractors' tax, as implemented in Ontario or Portugal. That is something that would perfectly suit the environment.

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