Róisín Shortall (Dublin North West, Labour)
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Question 102: To ask the Minister for Social and Family Affairs if she will review the rules applying to jobseeker's allowance for the assessment of self-employed persons and contract workers to social assistance payments in view of the sudden drop in income affecting both sets of workers. [3534/09]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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The combined employee and employer social insurance contribution for general employees, paying class A PRSI, is 14.05%, excluding levies. Self-employed people, on the other hand, are only liable for PRSI at the class S rate of 3%. These much lower contributions give coverage towards long-term benefits such as State and widow's pension but do not enable a person to qualify for short-term insurance payments such as illness benefit or jobseeker's benefit.

A system of separate arrangements for employed and self-employed workers within a social insurance context is common in other European social protection systems. Self-employed people can apply for the means-tested jobseeker's allowance if their business ceases or if they are on low income as a result of a downturn in demand for their services.

Their means would be taken as any net profit that they will earn in the coming 12 months. While their income from the previous 12 months is used as an indication in estimating their likely future earnings, it is not simply assumed that the previous year's earnings will be received in the coming year. Instead, account is taken of the potential for significant upward or downward variations in income from one year to the next.

For example, if a self-employed person lost a contract and was unlikely to find a substitute contract in the coming year, this would be factored into the assessment of future income. The implications of the present downturn in the economy are of course taken into account.

If a self-employed person's situation changes after they have made an initial claim for jobseeker's allowance, they can apply to have their means reviewed in the light of their changed circumstances. In addition, it is open to the individual, if he or she is dissatisfied with the means assessed, to appeal to the social welfare appeals office.

I appreciate the difficulties currently being faced by many self-employed people. However, extending social insurance cover for short-term benefits to this group would have significant financial implications and would have to be considered within a budgetary context.

Consideration would also have to be given to an appropriate increase in the rate of the PRSI class S contribution. In that context, the Government has no immediate plans to change the current arrangements. Instead, we will continue to ensure the mechanisms used for assessing means for jobseeker's allowance are sufficiently adaptable to meet the challenges presented by the current economic situation.

Róisín Shortall (Dublin North West, Labour)
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I wonder if the Minister is aware of the scale of the problem. In recent years, a significant number of people were forced to become self-employed. In many cases self-employment is not a matter of choice. For example, it has been difficult to secure regular employment in the building industry because contractors have insisted that those working for them are treated as being self-employed. Similar conditions applied in the information technology industry.

In the current economic circumstances, where work has dried up in many sectors, it is completely unrealistic for a deciding officer to consider a person's means to be his or her income from the previous year. People seek assistance at social welfare offices because they cannot secure employment and work has dried up. Last week, the Minister spoke of showing solidarity to the unemployed. The people to whom I refer find themselves without income and, unfortunately, unable to access support from the Department. While the circumstances I describe do not apply in all social welfare offices, deciding officers in certain offices are still using the old method of assessing a person's means. Under this approach, a person's income from the previous year is considered as applicable for the current year. This method is completely unrealistic in the current circumstances.

Does the Minister accept that the problem I describe is real? If so, will she issue new guidelines to deciding officers to take account of the changed economic circumstances and provide some level of support to self-employed people who find themselves without income?

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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A large number of self-employed people are finding things very difficult. It is true that many self-employed people will not necessarily earn the same level of income this year as they did last year. This is particularly true in the case of those may have secured employment in a large contractor in the construction industry. For this reason, a degree of flexibility is provided. The Deputy, like me, will be aware of cases where this flexibility has been applied and people have been given jobseeker's allowance based on poor projected earnings for this year and having regard to the economic downturn. While I am not sure further guidelines are required, I am conscious that a flexible approach must be taken to self-employed people.

Even in the context of income for self-employed people from the previous year, many allowances are made for outgoings such as property, savings and investment and so forth. All these items are taken into consideration.

I will keep the matter under review because I am aware that people in the self-employed category have suddenly found themselves in difficulty. As I stated, I have observed in practice how the flexibility available to social welfare offices allows people to receive jobseeker's allowance based on a genuine, realistic projection of income rather than the previous year's income.

Róisín Shortall (Dublin North West, Labour)
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That is not the case. I have details of two cases. One of these relates to an IT worker living in south Dublin who was obliged to be self-employed last year when his income amounted to €306 per week. When work dried up he applied for assistance and is being assessed as having income this year of €306 per week. Although the man in question does not have any income or any prospect of income, the Department is not providing any support.

The Minister stated that flexibility is available to social welfare offices. While that may be the case, not all deciding officers are exercising it. In light of this and given the current circumstances, will the Minister consider issuing new guidelines on the need to deal with circumstances in which people find themselves without an income? The Department must stop the current nonsense whereby a deciding officer considers that when a person has a certain income in the previous year, he or she is likely to have a similar income in the current year. Those circumstances no longer apply.

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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The Department is aware that they do not apply in the case of many people. This is the reason flexibility may be shown. I will ensure that deciding officers are aware that they have such flexibility and may exercise it. The people in difficulty to whom the Deputy refers should also be aware that they may qualify for many supplementary benefits.

Róisín Shortall (Dublin North West, Labour)
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Will the Minister issue new guidelines to deciding officers?

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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I do not believe new guidelines are required because flexibility is available. We will, however, make the deciding officers aware that they may show flexibility.