Willie Penrose (Longford-Westmeath, Labour)
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42. To ask the Minister for Employment Affairs and Social Protection the steps she is taking to tackle bogus self employment; if her attention has been drawn to the fact that the amount collected under the national training fund levy on employers is nearly 9% below profile; if this is also impacting on employer PRSI returns; and if she will make a statement on the matter. [39646/17]

Willie Penrose (Longford-Westmeath, Labour)
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My colleague, former Minister, Deputy Joan Burton, set up a working group on bogus self-employment in July 2015, that is, over two years ago. It has not yet reported. Will the Minister indicate when this report will be forthcoming and will she outline what action will be taken? This aspect of bogus self-employment is a scourge, and there is only one set of losers.

Regina Doherty (Meath East, Fine Gael)
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I have taken a big interest in this in the last couple of months. I was of the view that the Deputy has just described but I was very much surprised by the results that I got back. I will outline an except and then I will discuss it with the Deputy.

In 2000, a national training fund levy of 0.7% was introduced by the then Fianna Fáil Government and it was incorporated into the employer's social insurance contribution in classes A and H, with no charges for anybody else. Social insurance receipts up to the end of August 2017 were €6.6 billion. This was almost €178 million or just under 3% ahead of profile. The anecdotal story that we are told that there are millions of euro not being paid by employers because they are manipulating or controlling of certain types of employees does not add up to the figures that come in. Then I have to delve deeper and say that we genuinely know that people are employed in very casualised environments. The construction industry is probably the most obvious to us, but other industries are doing the same.

I have taken some time to look at how we can address those issues. It is much more complex than I expected. I expected to be able to introduce an employers' levy for people who are not self employed, because the easy way is to increase the employee's PRSI from a self-employed perspective, and that is the last thing that I am going to do. While I am adamant that I am going to improve and expand all of the social insurance benefits that have been available to people on other classes to self employed people, and actually improve the social insurance benefits to everybody else, I am certainly not going to increase the employee's PRSI contribution. I am looking at how I can best address the issue of probably a relatively small number of people or businesses in that space that are taking advantage of people and to provide some sort of levy or penalty to address the ongoing issue.

At the same time, and if the Leas-Cheann Comhairle can give me a little latitude, there are thousands of people who have never heard of Scope and do not have a clue that there is a body.

Additional information not given on the floor of the House

This includes an amount of €282 million for the national training fund. This was €7.8 million ahead of profile, also 2.7%. Bogus self-employment is where employees and employers wilfully evade income tax and social insurance liabilities.

Social welfare inspectors carry out visits to a wide range of businesses, as part of their ongoing compliance operations. Inspections are occasionally undertaken jointly with other State agencies such as the Revenue Commissioners and the Workplace Relations Commission. Where evidence of non-compliance is detected, this will be pursued.

Officials will also investigate details of specific cases supplied to my Department’s Scope section. This section deals with employers, employees and the self-employed, who may apply to have an employment or self-employment status investigated and the correct class of pay-related social insurance, PRSI, determined.

Where the misclassification of workers as self-employed is detected, the correct insurability status of the person concerned is determined and social insurance arrears are collected. Under the Social Welfare Consolidation Act, there are specific offences in regard to employment contributions, their remittance and the maintenance of prescribed wages and employment records. On conviction, fines and or imprisonment can ultimately be imposed.

Any worker who has concerns about their employment and PRSI status should contact my Department and the matter will be investigated.

My Department has concerns that some types of employment structures may be being used to reduce the amount of PRSI and tax being paid, with a subsequent loss to the Exchequer and the Social Insurance Fund. An interdepartmental working group, comprising officials from my Department, the Department of Finance and the Revenue Commissioners has been examining the issue and I expect to receive a report shortly.

Pat Gallagher (Donegal, Fianna Fail)
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I will give the Minister latitude. The balance of her response will be in the Official Report.

Willie Penrose (Longford-Westmeath, Labour)
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I am concerned that people are being forced to present as self-employed to get work. It is an issue in the construction industry. We are not all living in cloud cuckoo-land, because it is. The returns to the national training levy - the 0.7% levy was correctly applied - is now 9% or €21 million less than profile. Why is it less than profile when employment is increasing and there has been a mass of returns? Is it because there is a large increase in self-employment in many businesses? The Minister is right that we do not want to impose levies on people, etc., but there is some reason for that.

There is much disguised employment. There are innovative people in disguised employment. There are people setting up as companies with one employee in employment.

Then there is an individual who is dependent on and under the control of the employer and who is forced into accepting self-employed conditions and being classified as in self-employment. As I have spent my life being self-employed, I know it is a different system.

Regina Doherty (Meath East, Fine Gael)
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I agree with Deputy Penrose. Both of us are on the same wavelength, except in one regard. We are not behind profile. We are €278 million ahead of profile. That is why it does not make any sense to me. My gut is telling me that there are people out there who are in vulnerable positions who do not know that we are here to help. I will make sure that they know while at the same time improving the employee rights, improving the employee benefits through the social contribution fund, and extending it to all self-employed to ensure that they are looked after as well as someone who is in employment.

The big part of this that is a puzzle to me - I am far from finished looking at it - is how I get to the employers to ensure that those who are manipulating the system get to pay into the Social Insurance Fund the same way as everybody does. That is a little more complex than I originally thought when I took over a few months ago.

Willie Penrose (Longford-Westmeath, Labour)
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The Minister will be aware that employers, trade unions, professional bodies and individuals made some 23 submissions to that working group. When will the working group report? Will the report be available to us soon, or what is the position, because that might be a help?

I am all in favour of self-employment - people starting up their own businesses have provided 300,000 jobs in the economy and they are very important - but I do not want some unscrupulous employers pulling a stroke, then disappearing and people who have been classified as self-employed not having any contribution record when the whole shebang collapses under them and being left high and dry. Of course, then such self-employed are subject to all sorts of investigations and everything else. The buck stops with them as opposed to the unscrupulous employer who has pulled a stroke on them. I want to protect the rights of those people who should be classified as employees but are classified as self-employed.

Regina Doherty (Meath East, Fine Gael)
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I will make two points to Deputy Penrose. The report will be ready for publication shortly. I had one concern. Some 23 submissions were received but only four came from self-employed people. It is a bit of a misnomer when one has public consultation on self-employment that 19 of the 23 submissions are from employers. I was a bit miffed by that. I am considering seeking submissions again, specifically to target self-employed persons. The report might otherwise be complete. I could issue an interim report, but I think we will wait for the complete picture.

Pat Gallagher (Donegal, Fianna Fail)
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I thank the Minister.

Regina Doherty (Meath East, Fine Gael)
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With the Leas-Cheann Comhairle's indulgence, I would say that anybody who finds himself or herself in the position Deputy Penrose described can retrospectively go back to Scope and get his or her social insurance contributions reinstated. That is the merit of Scope.