Seanad debates

Wednesday, 9 November 2011

 

Social Welfare Code

1:00 pm

Photo of Fidelma Healy EamesFidelma Healy Eames (Fine Gael)

I welcome the Minister of State again. He has been here two weeks in a row. I call on the Minister for Social Protection to justify how self-employed PRSI contributions can be taken from an individual while that individual, a self-employed person, is entitled to nothing and to no financial contribution when injured or ill through no fault of their own.

Self-employed people in Ireland pay an S class social insurance payment as mandatory. At the moment, the payment stands at 4% of earnings of all reckonable income above €5,000 or €253, whichever is greater. This contribution currently entitles the payee to class S benefits, including widow's, widower's or surviving civil partner's pension contributions; guardian payments contributory; State pension contributory; maternity benefit; adoptive benefit; and bereavement grant. Unlike most other classes of social insurance payments, class S PRSI does not provide cover for any other schemes or benefits such as jobseeker's, occupational injuries or illness benefits. The Minister of State knows that in the current downturn self-employed people, and not just their employees, have suffered high levels of unemployment. They have paid not just their own but PRSI but employers' too. The situation seems to be totally unjust.

Many people have raised this issue with me and have asked why they are the fall guys. The rules governing PRSI contributions by the self-employed, which prevent access to State support, are causing unnecessary financial hardship for some families and need to be urgently reviewed. In addition, if we wish to foster and encourage enterprise and self-employment in Ireland we must seriously address this issue, something all members of the Government are trying to do.

It is absolute madness to expect self-employed people to pay a compulsory social insurance payment which provides no cover whatsoever if they are injured or become ill through no fault of their own. Many self-employed people now find themselves without work through illness and injury and are not covered by PRSI as a result of the rules governing contributions made by the self-employed.

I have met at least three people in my office about this issue. The livelihood of one man is at risk and he brought the detail of his situation to me. We need to explore the UK model which allows self-employed people to become employees in certain situations and pay PRSI contributions which offer protection when individuals become sick or injured and cannot work. It is a reasonable proposal.

One such example where this situation is causing serious hardship for people and their families is the case of a self-employed man who has paid taxes and PRSI since 2000. When he was injured in a road traffic accident, having been rear-ended by a drunk driver, he was shocked to discover he was not entitled to any injury or sickness payment while incapacitated and unable to work in July and August 2010 or following corrective surgery during July, August and September 2011.

In order to meet his financial obligations and living expenses on a daily basis he has had to arrange an overdraft with his bank, something which should have been paid for by sickness benefit. He has told me that while he could take out private insurance in the future at a cost of €300 for an annual premium providing benefits of €500 per week in the case of not being able to work due to injury, he cannot afford to pay for State and private insurance and illness is still not covered by either. If he had invested a small sum of money in private insurance rather than in the State he would have benefited from injury cover.

Self-employed people cannot continue to bear the burden whereby they are entitled to less from their social insurance contributions than their employees. It is strange that an employer, who is the multiplier and has the responsibility to pay employer and personal contributions, is entitled to nothing if he or she falls ill or becomes injured, especially when a self-employed person pays more in contributions than employees. The situation is grossly unfair and cannot be allowed to continue in a State which is crying out for people to become self-employed to help drive recovery.

I ask the Minister, through the Minister of State, to justify how the PRSI contributions of the self-employed can be paid, yet those who pay it are entitled to nothing when they become ill or are injured through no fault of their own. I look forward to the response.

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