Willie Penrose (Longford-Westmeath, Labour)
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45. To ask the Minister for Social Protection his plans to reform PRSI. [17588/17]

Willie O'Dea (Limerick City, Fianna Fail)
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46. To ask the Minister for Social Protection the social insurance measures that are to be introduced in December 2017 for the self employed; the type of benefits that will be included; the amount which has been allocated for this extension; the estimated full year cost of the measures that are due to come into effect in December 2017; and if he will make a statement on the matter. [17858/17]

Willie Penrose (Longford-Westmeath, Labour)
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What plans has the Minister to extend and reform PRSI? He has recently spoken about this possibility. In particular, what plans are there to extend the range of benefits for people who make their PRSI contributions. There has been a recent debate in the House on that issue.

I got a letter today from the mother of a surrogate child. She is a teacher who pays PRSI. She gets no PRSI benefit, no maternity benefits, nothing. That is a huge hole in the availability of benefits for people.

Leo Varadkar (Dublin West, Fine Gael)
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I do not know why that is so. The Deputy might pass that letter on to me. I would be interested to see it.

Willie Penrose (Longford-Westmeath, Labour)
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I was shocked by the letter.

Leo Varadkar (Dublin West, Fine Gael)
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It may concern a pre-1995 public servant who pays 0.9% rather than 15%. If the contribution is less than one fifteenth of the normal contribution, the benefits will be less.

Willie Penrose (Longford-Westmeath, Labour)
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That could be the case.

Leo Varadkar (Dublin West, Fine Gael)
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I propose to take Questions Nos. 45 and 46 together.

PRSI is just one element of a statutory payroll deduction system that includes three parts, income tax, USC, and PRSI, which between them have three different sets of thresholds and entry points, seven bands and eight rates. Given its complexity, this is a system that most people find difficult to understand. It is expensive to administer and can be inequitable. For example, certain reliefs and benefits are available to employed people but not self-employed people.

Welfare and taxation systems which use income and other thresholds to trigger eligibility and payment rates will inevitably give rise to some unintended effects at the margins of these thresholds and these can reduce incentives for people to work or for employers to offer employment. We should therefore constantly seek ways to improve how the system works and, in particular, how it can be simplified and its benefits to contributors and taxpayers made more transparent.

As one example of how the system could be simplified and made more transparent, it might make sense to replace the USC and PRSI with one new PRSI-style charge: social insurance. This could in turn be linked to wider and better benefits. This is an option I intend to explore further once the results of the actuarial review of the Social Insurance Fund, which is currently underway, become available later this year. These results will allow us to calculate long-term costings for any changes to social insurance.

We also need to make the system more equitable, particularly for self-employed people, and I have already started this process by implementing a number of important measures as part of budget 2017.

Since March 2017, self-employed people have access to the treatment benefit scheme which includes free eye and dental exams and contributions towards the cost of hearing aids. These measures benefit over 300,000 self-employed workers and their dependants and will cost €3.5 million in 2017 and €4.5 million in a full year. Treatment benefit entitlements will also be extended from October 2017 to provide further dental and optical benefits for both the self-employed and employees. The cost of this measure is €9 million in 2017 and €47 million in a full year. Over 2.5 million workers, including the self-employed, will benefit from these additional benefits.

Self-employed workers will be also be eligible for the invalidity pension from December 2017. This is a major reform as, for the first time, self-employed people will have access to the safety net of State income supports without having to go through a means test if they become permanently incapable of work as a result of an illness or disability. It is estimated that 1,400 self-employed people will immediately qualify for invalidity pension based on contributions made to date from December 2017, giving rise to a cost of €1.5 million this year. The estimated 2018 and 2019 costs are €23 million and €38 million respectively.

Willie Penrose (Longford-Westmeath, Labour)
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I note that it is the Minister's intention to roll the PRSI and USC into one scheme.

How would that progress, and what impact would it have in terms of the various existing wage structures? I know the PRSI system is complex.

I salute the Minister for attempting to end the discriminatory way self-employed people were treated. I know that from first-hand experience as I was self-employed before I was elected to this House. They way they were treated was disgraceful. I always believed self-employed people had a legal case to make against the State and it was in my head to take it before I got elected here.

The Minister is due to bring a social welfare and pensions Bill to the House soon. Would he consider extending maternity benefit to those mothers whose babies are born prematurely? It is a simple measure that we discussed here previously ad nauseamby way of a motion. In an emotional contribution, Deputy Catherine Martin of the Green Party made a compelling argument in favour of the motion, for which I believe all the colleagues were present at the time. I understand it would only cost €5.4 million, which is not a lot of money when the Social Insurance Fund is on target and unemployment, thankfully, is falling. I ask the Minister to consider bringing that forward.

Willie O'Dea (Limerick City, Fianna Fail)
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First, will the Minister reiterate the figures? It is €1.5 million this year for the introduction of invalidity pension for the self-employed in December. I think he mentioned €23 million next year and then €28 million. He might clarify that. I appreciate the fact that, for the first time, the self-employed will benefit by way of getting invalidity pension without a means test as and from December. Could the Minister give us some idea of the criteria that will apply? He stated that 1,400 people will qualify based on contributions paid so obviously he has worked out the contributions system. Will it be the same as that for employees?

Second, one of the criteria for getting an invalidity pension is that the person must be deemed to be permanently incapacitated. Many self-employed people, through injury, temporary illness or otherwise, become temporarily incapacitated; they are not permanently incapacitated. In such a case an employee can avail of illness benefit. What will be the position for the self-employed when invalidity pension is introduced for them?

Leo Varadkar (Dublin West, Fine Gael)
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I will have to get back to the Deputy with the details on that. The self-employed will be able to apply for invalidity pension but not illness benefit. There is a difference between the schemes but the criteria for the self-employed will be the same as for employees for invalidity pension.

The costs for 2017 are €1.5 million; €23 million for 2018 and €38 million for 2019 but it is very much an estimate. We do not know for certain the number of people who have been paying PRSI at class S as self-employed are unable to work long-term because of illness or injury. It is one of these measures for which we will find out a definite cost when the scheme is in place, although so far I have found the officials in my Department to be fairly accurate in their costings. I hope it will come in a little cheaper than that but we will know when it happens.

In terms of maternity benefit, maternity benefit flows from maternity leave so it is a matter for the Minister for Justice and Equality and the Oireachtas to make a decision on maternity leave but if that decision is made, we will follow on with that in terms of maternity benefit.

I did not have a chance to follow the debate but I can see the compelling case that may exist for extending maternity leave and maternity benefit where a child is born prematurely. However, we would need to think it through because children born prematurely can be very healthy and not spend any more time in hospital than any other child yet other children who are born full term or who come late have to spend a good deal of time in hospital due to all sorts of problems and issues. We would need to look at the entire area in the round.

Willie Penrose (Longford-Westmeath, Labour)
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We had a comprehensive debate on this and there was a unanimous view among colleagues on all sides of the House. The range we focused on at that time was from 24 or 25 weeks up to 37 weeks. In the interests of fairness, there are huge costs associated with premature births. The Minister will be aware that a parent might have to attend one of the specialised neonatal units and may have to travel from Mullingar to Dublin, as well as to look for accommodation. There are many costs involved, and the 26 weeks of maternity leave are utilised, as well as the non-paid term, without the mother getting a chance to bond with the child. This is a very important issue. The money comes from the Minister's pot whereas the legislation will have to be prepared by his colleague, the Tánaiste and Minister for Justice and Equality, Deputy Fitzgerald, and the Minister of State, Deputy Stanton. This is a measure that would be of immense benefit to mothers across Ireland and if the Minister is not able to do it soon, it certainly should be included in the budget in the autumn.

Willie O'Dea (Limerick City, Fianna Fail)
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Will the Minister consider extending eligibility to self-employed people who will be in receipt of illness benefit on a short-term basis, perhaps after December 2017? Many of them are not permanently incapacitated and therefore would not qualify for invalidity pension on those grounds. However, they are temporarily incapacitated and if such a person's spouse happens to be working, he or she would not be entitled to jobseeker's or disability allowance or the means-tested benefits, which can be demeaning.

I ask the Minister about his plans regarding the unemployed and jobseeker's benefit. Has he given consideration to the notion of extending jobseeker's benefit to the self-employed on a voluntary contributions basis?

Leo Varadkar (Dublin West, Fine Gael)
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In response to Deputy Penrose first, it does not have to be the case but it has always been the case that the benefit is aligned with the leave. If somebody gets X number of weeks statutory maternity leave we will match that with the benefit. I had intended to do the same. Of course, the money does not come from my pot. It comes from the Social Insurance Fund so that has to come from contributions from people working and paying their PRSI every week. However, I believe it is something people would be willing to pay PRSI for and I do not believe that would be a great difficulty if the rules around leave are changed.

In terms of the other benefits for the self-employed, I have asked my Department to do up some work on a system of jobseeker's benefit for the self-employed. It is a tricky one because it is very obvious when somebody who is employed becomes unemployed in that they get a P45. It is a little trickier to establish when a self-employed person becomes unemployed. I have not made a decision on it yet. The earliest we can bring it in would be 2018 but perhaps in line with proposals the Deputy has made in the past, a voluntary scheme with somebody paying for a new stamp or voluntarily paying a higher rate of PRSI in return for that additional benefit might well be the most sensible way to proceed.

On short-term illness, we will examine that too. The order in which we are doing it is treatment benefit, invalidity pension, jobseeker's and then short-term after that.