Olwyn Enright (Laois-Offaly, Fine Gael)
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Question 35: To ask the Minister for Social Protection if his attention has been drawn to the difficulties self employed persons experience in claiming jobseeker's allowance under the current system; if he has any plans to reform the PRSI system in order that self employed persons can benefit from adequate support when they become unemployed or when their business fails; and if he will make a statement on the matter. [21937/10]

Éamon Ó Cuív (Galway West, Fianna Fail)
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Self-employed persons pay PRSI Class S contributions which provide cover for long-term benefits such as State pension and widows/widowers pension. Employees are covered by PRSI classes A, E, H and P, which provide cover for the above benefits as well as for short-term contingencies such as jobseeker's and illness benefits.

PRSI coverage is related to the risks associated with employment or self-employment, the annualised system of contributions for self-employed persons and the practicalities of administering and controlling access to short-term payments. Self-employed persons pay class S contributions at a rate of 3% per annum as compared to the 14.75% full class A contributions paid by employees and their employers, to reflect the narrower range of benefits they receive. A system of separate arrangements for employed and self-employed workers within a social insurance context is common in other European social protection systems.

A self-employed person who has paid insufficient class A contributions may instead qualify for jobseeker's allowance. Jobseeker's allowance is a means-tested payment and, in assessing a person's means, account is taken of all income which the person may reasonably expect to receive during the succeeding year. In general, the person's means will take account of the level of earnings in the last 12 months in determining the person's expected income for the following year. In the current climate account is taken of the downward trend in the economy and it is accepted that future earnings may be lower than those of previous years. The process also recognises the potential for significant upward or downward variations in income from one year to the next.

There are no plans to extend cover for short-term benefits to this group of insured workers. Any such measure 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.

Olwyn Enright (Laois-Offaly, Fine Gael)
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There are two strands to the question, how to deal with the persons who were self-employed who now find themselves in a position where they no longer have employment and then to look at the PRSI contributions to ensure that down the road more self-employed persons do not find themselves in this position because they paid only the class S rate.

To deal with the more immediate problem, no doubt the Minister, like myself and all our colleagues here, is dealing with this every day. There is a significant number of persons who were self-employed who suddenly find themselves with practically no entitlements on losing their jobs. The Minister has mused over the past two weeks in The Sunday Business Post on some of his views in this regard. He spoke of his new scheme, the employer job initiative scheme. I understand it is the one to which he referred in the articles, although it is not clear all of the time because we do not have the detail. The Minister seems to think that the skills among those fully qualified self-employed persons are most suited to this scheme. Can he explain how the scheme will work to particularly help that category of person?

Éamon Ó Cuív (Galway West, Fianna Fail)
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Deputy Enright is correct in stating that there are many self-employed persons who did not understand that they were not covered, for example, for jobseeker's benefit, until the employment dried up. There were many in the construction industry who never thought the work would cease, particularly those with trades, and suddenly they find themselves in a situation where they are not entitled to jobseeker's benefit. Many of them who have partners or spouses also find themselves in a situation where they are not entitled to jobseeker's allowance. That is something Deputy Enright and I have encountered. They are not covered. They have not paid the contribution to be covered for unemployment benefit, it is a clear statutory position. On the other hand, there is a pool of talent that could do considerable work in providing services to the community.

There is a model in terms of farmers. For farmers who have low incomes and self-employment, there is farm assist, but there is also the rural social scheme where they work in the community and provide services in return for which they get a fixed payment. None of these functions has transferred to my Department and therefore the situation of setting up schemes is something for the future. The Deputy has identified a challenge and we must see how to deal with that challenge. There is no question of giving them rights to jobseeker's benefit because, quite simply, they have paid 3% on the self-employed contribution and this does not entitle them to short-term benefits.

Olwyn Enright (Laois-Offaly, Fine Gael)
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With respect, the Minister has not answered my question; he has just elaborated on my question. The Minister stated in interviews that he regards this new scheme as being particularly useful for people who formerly worked in the trades and in the construction sector to facilitate them in gaining employment. How will this scheme specifically help the category of formerly self-employed people? My question is specific.

Éamon Ó Cuív (Galway West, Fianna Fail)
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As I said, legislation is required to transfer the legal powers to deal with these matters.

Olwyn Enright (Laois-Offaly, Fine Gael)
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The Social Welfare Bill will be taken in two weeks time.

Éamon Ó Cuív (Galway West, Fianna Fail)
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Exactly. Please God, the powers will be transferred and then we will be able to deal with creating activation in order to give people an opportunity-----

Olwyn Enright (Laois-Offaly, Fine Gael)
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The Minister said specifically in an interview that this new scheme would be suited to the self-employed.

Brendan Howlin (Wexford, Labour)
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Please allow the Minister to reply.

Olwyn Enright (Laois-Offaly, Fine Gael)
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That is all I am asking. He is not answering my question.

Brendan Howlin (Wexford, Labour)
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Please allow him to answer.

Éamon Ó Cuív (Galway West, Fianna Fail)
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I fully agree with the Deputy that there is a challenge here for self-employed people and I intend bringing forward proposals to see how to deal with this issue. Obviously it will be required to go to Cabinet. I do not have the legal responsibility at the moment but I am sure the Deputy agrees that this is an issue that needs to be tackled because there is a significant challenge for self-employed people at the moment.