Thomas Pringle (Donegal South West, Independent)
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67. To ask the Minister for Social Protection her plans to provide unemployment and disability benefits for self-employed PRSI contributors; if she will consider introducing changes to PRSI contributions to provide for same; and if she will make a statement on the matter. [31168/14]

Thomas Pringle (Donegal South West, Independent)
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This relates to self-employed PRSI contributors and the Minister's plans, if any, to provide unemployment and disability benefits for them.

Joan Burton (Dublin West, Labour)
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Self-employed people are liable for PRSI at the class S rate of 4%. This entitles them to access valuable long-term benefits, including benefits such as the contributory State pension and widow's, widower's and surviving civil partner's contributory pension, as well as maternity benefit. The advisory group on tax and social welfare found the current system of means-tested jobseeker's allowance payments adequately provides cover to self-employed people for the risks associated with unemployment. 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. In this regard the group recommended that the rate of contribution for class S should be increased by at least 1.5 percentage points, payable on a compulsory basis. 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 with employed workers.

If we are to extend the benefits, we would have to have an additional contribution. The Deputy is probably aware that in the legislation, which was passed recently by the House, we extended the right to insurance to the spouses and partners of people who are self-employed. I estimate that will benefit an additional 5,000 to 6,000 people, many probably coming from the farming community.

Thomas Pringle (Donegal South West, Independent)
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The extension of the class S contribution to allow for invalidity pension is a welcome development for self-employed people. A greater issue than the cost and value for money is the fact of having a safety net if one is self-employed. Many are forced to be self-employed and do not choose it. To have the safety net of an entitlement to jobseeker’s benefit would be of great benefit to them and would encourage people to take up self-employment. Self-employed people would be less likely to become unemployed and would be less of a drain on the State.

While the Department of Social Protection has moved to ease the burden for self-employed people to get jobseeker’s allowance, having an entitlement to jobseeker’s benefit would encourage them to become self-employed. That should be examined. The Minister says that people entitled to invalidity pension and unemployment assistance would also be entitled to a disability allowance, which is a continuous payment. I do not see why she can extend some payments and not others.

Joan Burton (Dublin West, Labour)
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The advisory group found that the current system of means-tested jobseeker’s allowance payments, to which the Deputy refers, adequately covers the self-employed. I am not sure that many people appreciate the point that almost nine out of every ten self-employed people who claimed the means-tested jobseeker’s allowance during the three-year period from 2009 to 2011 received payment. Many of those would have been working in construction or allied trades. A very high percentage of those who applied for jobseeker’s allowance got it. The group recommended the extension of social insurance cover for self-employed people who are permanently out of work through long-term illness or incapacity. It recommended a compulsory basis rather than an opt-in or out system because for social insurance one needs national cover. The contribution rate for the self-employed is 4% for the important benefits they get, whereas the contribution for people in employment, through the employer’s and their own contribution, is close to 15%. If self-employed people wanted the full range of cover they would have to contribute 15%.

Thomas Pringle (Donegal South West, Independent)
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While I recognise the contribution for the self-employed is much lower than for those in employment, there should be recognition that they are self-employed and are quite likely to be employers themselves through the nature of their business. A lower rate of around 8% should be brought in to allow them have all the benefits such as jobseeker’s benefit if they become unemployed through no fault of their own.

While people who ended up unemployed got jobseeker's allowance, this did not happen until after they had gone through a tortuous process. In some cases I have dealt with, people have had to wait for between a year and a year and a half to get their payments. The demands made when the Department placed the onus on them were difficult to achieve. The nub of the problem is that the contributory old age pension is the only thing self-employed people who made contributions but ended up unemployed through no fault of their own are entitled to. It is very difficult for people in their 30s to comprehend that they will have to wait until they are 67 or 68 to benefit from their PRSI contributions. We should give serious consideration to this proposal in recognition of the contribution of the self-employed and the fact that they are likely to be employers. It should be taken on board.

Joan Burton (Dublin West, Labour)
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Everybody present in the Chamber will recall that the set of circumstances outlined by Deputy Pringle was a strong and sad feature of the 2011 general election campaign. Each of us met many people who had been left in this precise situation. It seemed to be taking years for them to have success in applying for the means-tested jobseeker's allowance. When I became Minister shortly after the election, I changed the way the applications worked by allowing people to detail their current circumstances. The previous Administration had based the applications on having full sets of accounts, tax data and everything like that.

Éamon Ó Cuív (Galway West, Fianna Fail)
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That is incorrect.

Joan Burton (Dublin West, Labour)
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We updated the information that people could bring in. We allowed them to bring in details of their current circumstances. As a consequence of that review and update, far more people qualified to get jobseeker's allowance.

Willie O'Dea (Limerick City, Fianna Fail)
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There is no difference in practice between now and before.

Joan Burton (Dublin West, Labour)
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That is why nine out of ten people now qualify to get it.

Éamon Ó Cuív (Galway West, Fianna Fail)
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If the Minister checks the record, she will find that it was always allowed under the current circumstances, as opposed to the historic circumstances. If she checks the replies to parliamentary questions that I gave as Minister, she will find that she has given the House incorrect information. I hope she will study the matter and correct the record of the House.

Joan Burton (Dublin West, Labour)
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Perhaps the experience was different in the Deputy's local area. In Dublin and many city areas, it was quite difficult for one to access a jobseeker's assistance payment unless one had very detailed accounting records. I assume this could partly be attributed to the sudden and serious nature of the collapse, particularly as it applied to self-employed contractors and subcontractors. The situation is now clarified. People can bring in and use their current details. The rules may have permitted that when the Deputy's party was in power, but the system was not operating in that way. Anyone who knocked on doors during the 2011 election campaign will recall repeatedly coming across families who found it extremely difficult to access these benefits. I am pleased to say the advisory group has acknowledged that nine out of ten people who can qualify for assistance payments are now qualifying for them.