Tuesday, 23 November 2010
Social Welfare Benefits
Question 34: To ask the Minister for Social Protection the position regarding the number of self-employed persons; the number of these who are currently unemployed; the pension provision of these persons; and if he will make a statement on the matter. [44059/10]
Self-employed people pay PRSI class S contributions which provide cover for long-term benefits such as State pension, contributory, and widows-widowers pension, contributory. 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 jobseekers and illness benefits. In 2008 there were 338,187 persons in PRSI class S. In general, contributors get good value for money by paying for social insurance contributions. PRSI coverage is related to the risks associated with employment or self-employment, the annualised system of contributions for self-employed people and the practicalities of administering and controlling access to short-term payments for self-employed people. Self-employed people pay class S contributions at a rate of 3% per annum, a much lower rate compared to the 14.75% full class A contributions paid by employees and their employers, and this is reflected in 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.
In this context it may be noted that self-employed workers generally achieve better value for money by paying social insurance compared to employees. The 2005 actuarial review of the social insurance fund found that a male, married, self-employed contributor earning gross average industrial wages had a value for money index of 10.3 compared to an index of 3.1 for an equivalent employee.
In basic terms this means that, with regard to benefits, the self-employed contributor can expect to receive over ten times what he contributes to the social insurance fund compared to the employee who only gets three times what he and his employer contribute despite the fact that the range of benefits available to employees is greater.
There are no plans at present 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.
The total number class S insurance is approximately 300,000. There are currently 9,016 people categorised as self-employed receiving jobseeker's allowance. The weekly average payment for this group is â¬206. In addition, there are 10,580 farmers receiving farm assist with an average weekly income of â¬207. However, I must warn the Deputy about those figures. If a self-employed person has zero income because his or her self-employment has finished, such as a lorry driver who had a contract for hauling cement or blocks which finished completely and he or she had sold the lorry and had no income, then such a person would not be classed as self-employed under my statistics.
Do we have statistics on the number of self-employed people who are unemployed and are not receiving any benefits? Do we know what the number is? They are the people who comprise the figure of 9,016 to which the Minister referred and are part of the live register. Do we have figures on the number of people who were self-employed and are now unemployed and who receive no payment?
Deputy Ring quoted a figure of 426,000 earlier. That is the live register figure which includes 60,000 people who are in part-time employment every week. The unemployment figure, as measured by the Central Statistics Office, is much lower than the figure the Deputy gave.
If a person became unemployed and does not claim a payment and sign for a credit, of course it does not include such a person. The people who were self-employed and become unemployed and would not be entitled to payment are those who have other means, for example they might own properties, have capital assets, have money in the bank or have a spouse's earnings taken into account, and therefore might not be eligible. I cannot give the Deputy an answer to the question because it is not available to me and we do not have a number.
It is not that simple. Some people who were self-employed give it up for many reasons and might decide they had enough income in the household to live on without being self-employed. That is a personal choice. It is very important that the social welfare code is a safety net for those whose income drops beneath a certain threshold. One of the concerns I have had for a long time is the issue of self employed people who became unemployed. Deputy Ring will know that for a long time I have believed the fairest system for the applicant and the State - if one is self-employed and allowed to have a self-employed income it is very hard to monitor it - is to offer work through activation. When one gets busy again one will not be able to do both and in the meantime one is contributing to society through one's work.