Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I thank the Deputy for raising this issue in the House because it is one that affects a number of people who are involved in home tuition. It is probably a subtle issue that many people would not have been aware of and I can understand that it is a bit confusing. Nevertheless, there are clear procedures and rules in place but I understand people will find them a little bit more complicated than the normal situation.

I am advised by the Revenue Commissioners that, from a Revenue perspective, the home tutors referred to by the Deputy are engaged under a contract of service. This means they are employees but the point is that they are not employees of the Department. They are engaged by the parents subject to satisfying criteria specified by the Department of Education. Prior to September 2015, the home tutors were paid by the parents from grants paid to them by the Department of Education.

As a consequence of a Revenue audit, the Department of Education agreed to operate the PAYE system on payments to the home tutors. This facilitates ease of administration as the payments originate from the Department. It also avoids placing an obligation to register as an employer and administer the PAYE system on each individual parent. It was done on an administrative basis for convenience and to assist everybody involved but it did not change the employment status of home tutors.

It should be borne in mind that PAYE is not a tax in its own right. PAYE is a withholding mechanism. Employers are obliged to deduct income tax from emoluments they pay to employees. Employees remain liable to income tax and the universal social charge, USC, on those emoluments. Application of PAYE does not confer an employment right on a worker. However, I understand that when many people get a pay slip and see who the money is coming from they would believe they are employed by them. However, even though the application of PAYE is made by the Department, it does not confer employment rights.

Matters of PRSI status and employment classification are determined by the scope section in the Department of Social Protection and the Workplace Relations Commission, WRC. I am advised that the scope section in the Department of Social Protection has examined the status of home tutors on a number of occasions and has determined that they are engaged under a contract for services, or self-employed, and that the appropriate PRSI class is class S. The Deputy can appreciate that in my earlier comment I stated that they are deemed to be employees from the Revenue point of view but the Department of Social Protection considers them to be self-employed. There is an unresolved issue here.

On eligibility for PRSI contributions, I am advised by the Department of Social Protection that self-employed workers who earn more than €5,000 in a contribution year are liable to pay social insurance contributions at a class S rate of 4%, subject to a minimum payment of €500. Such contributors, once they satisfy the scheme-specific criteria, in addition to having the required number of social insurance contributions, are covered for a wide range of social insurance benefits. This includes: the State contributory pension; widow's, widower's or surviving civil partner's contributory pension; guardian's contributory payment; maternity, adoptive and paternity benefits; treatment benefits; invalidity pension; partial capacity benefit if in receipt of invalidity pension; jobseeker's benefit for self-employed persons; and parent's benefit.

The following point is important. The Revenue advises that it is available to engage with officials in the Department of Social Protection and the WRC to discuss any determination that might arise under social welfare and employment legislation. The Department of Social Protection is probably the key Department dealing with this issue. The Revenue's involvement is straightforward from an administrative point of view. The Department and the Revenue Commissioners are available to discuss this with the Department of Social Protection and the WRC to try to resolve this matter.

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