Willie O'Dea (Limerick City, Fianna Fail)
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7. To ask the Minister for Social Protection the progress made to date to broaden the social insurance system to include the self-employed; and if she will make a statement on the matter. [10445/14]

Willie O'Dea (Limerick City, Fianna Fail)
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This issue arises from the fact that a report submitted to the Government in May 2013 recommended certain changes to make more benefits available to the self-employed under the social insurance scheme. Has any progress been made on that?

Joan Burton (Dublin West, Labour)
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Self-employed persons are liable for PRSI at the class S rate of 4%. This entitles them to access valuable long-term benefits such as the contributory State pension and contributory widow's, widower's or surviving civil partner's pension. In September 2013, I published the report of the advisory group on tax and social welfare on extending social insurance coverage for the self-employed. The group was asked to examine and report on issues involved in extending social insurance coverage in order to establish whether such cover is technically feasible and financially sustainable, with the requirement that any proposals for change must be cost-neutral.

The group found that the current system of means-tested jobseeker’s allowance payments adequately provides cover to self-employed people for the risks associated with unemployment. In this context, the group noted that almost nine from every ten self-employed people who claimed the means tested jobseeker’s allowance during the three-year period from 2009 to 2011 received payment. Consequently, the group was not convinced there was a need for the extension of social insurance for the self-employed to provide cover for jobseeker’s benefit. The group also found that extending social insurance for the self-employed was warranted in cases related to long term sickness or injuries. To this end, the group recommended that class S benefits should be extended to provide cover for people who are permanently incapable of work because of a long-term illness or incapacity through the invalidity pension and the partial capacity benefit schemes. The group further recommended that the extension of social insurance in this regard should be on a compulsory basis and that the rate of contribution for class S should be increased by at least 1.5 percentage points.

This recommendation will require further consideration in conjunction with the findings of the most recent actuarial review of the social insurance fund, which indicated that the self-employed achieve better value for money compared to the employed when the comparison includes both employer and employee contributions. The self-employed pay 4% but employer employee contributions for somebody in employment amount to 14.75%. My colleagues in the Government and I will reflect on the findings of the advisory group and we are considering the recommendations, taking into account the economic position.

Willie O'Dea (Limerick City, Fianna Fail)
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The report was submitted to the Government in May of last year. It is now approaching its first birthday and the Government is still reflecting. The recommendation was specific, that change be made to provide that at least those who take the risk to go into business for themselves and who become incapacitated as a result of developing a long-term illness should be brought into the social insurance scheme.

Is the Government giving any consideration to a voluntary system? The final recommendation of the report was that that should be done on a compulsory basis. Of course, an alternative would be a voluntary system.

Has any consideration been given to extending benefits to incorporate jobseeker's benefit, also on a voluntary basis? The appendix to the report is interesting in that it sets out the various countries in the EU 28 and shows which countries provide for loss of employment or long-term illness. Countries that provide for these eventualities include Greece, Romania, Lithuania, Estonia, but in Ireland there is no cover for the self-employed who lose their employment or who become ill on a long-term basis.

Joan Burton (Dublin West, Labour)
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The net point here is to do with cost and economic sustainability. The actuarial study of the Social Insurance Fund showed what people know, which is that a self-employed person paying 4%, who is covered for areas such as maternity benefit and widow's and survivor's pensions and for the retirement pension, gets an extremely good deal compared to the person in employment for whom the contribution is a total of 14.75%.

As to whether we extend this cover, personally, I strongly agree with the recommendations of the advisory group. It makes sense. If a self-employed person becomes ill, he or she has no access, for instance, to an invalidity pension and may have no private insurance. However, as Deputy O'Dea will probably be aware, quite a number of organisations representing the self-employed were critical of the idea at this point in time of any increased contributions to cover the cost, but perhaps they should give more consideration to that position.

On the second point,-----

Willie O'Dea (Limerick City, Fianna Fail)
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I asked whether it could be done on a voluntary basis.

Joan Burton (Dublin West, Labour)
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-----the recommendation in the report states clearly that it would have to be mandatory, that a voluntary scheme in this type of situation would simply not work and one would not get a sufficient financial contribution to cover the numbers who over a period of time would be likely to benefit. By the way, this would be introduced on a staggered basis over a number of years.

Willie O'Dea (Limerick City, Fianna Fail)
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I do not agree with the notion that a voluntary system would not work. Voluntary systems have been put in place in other countries and they are demonstrably working.

I refer the Minister to the section of the report where the group discusses the attitude of some social welfare officials to the self-employed when they claim jobseeker's allowance. Among certain sections of the Department of Social Protection, there seems to be an assumption that the self-employed are automatically not entitled to jobseeker's allowance.

Joan Burton (Dublin West, Labour)
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As Deputy O'Dea read the report, he will be aware that the group carried out a specific examination. After I became Minister, I changed the method of assessment which is carried out by social welfare assistants on the self-employed accessing jobseeker's allowance. For instance, if there is a catastrophic fall or collapse in a person's business, under the previous Government of which Deputy O'Dea was a member the assessment was based on earlier years' income statements when the business might have been fine. For both those involved in farming and fishing and in self-employment, the way the assessment is done now is that if there has been a catastrophic fall, the person can put his or her current financial position on the table to be examined by the Department. As the report shows, in fact, 75% of those so assessed accessed jobseeker's allowance. Of course, the reasons for not accessing jobseeker's allowance, because it is means tested, would include that the person's spouse or partner might well be working while the applicant has lost employment.