Joan Burton (Dublin West, Labour) | Oireachtas source

The purpose of the section is to extend PRSI to the private income of public servants who have a public service income. For example, hospital consultants may have a significant private income. The last report by the VHI stated that 300 hospital consultants earned in excess of €100,000 from their private income via the VHI. For historical reasons the private income was not subject to PRSI. Section 6 proposes to extend the PRSI provisions to their private income and I anticipate that it will yield a modest but important additional €12 million to the collection of PRSI here. The provision will help to bridge the gap between the commitments given to people who have contributed to the Social Insurance Fund and the fund's deficit.

We have discussed the fund's deficit before. Last year I published an actuarial review that showed how much the deficit had grown. Obviously the current deficit has grown due to the large number of people who are unemployed and are claiming benefits such as jobseeker's benefit. As we have discussed on a number of occasions, the population of older people is growing. It is great that people can retire.

However, the annual cost to the social welfare system of providing for the extra retirement payments is approximately €200 million per year. It was an anomaly that people paid PRSI on all their income, except this group. The amendment is to extend it to this group. Because it comprises public servants who have entitlements to public service pensions, it is important that they contribute in the same way as those whose entire income is in the public service or the private sector and pay PRSI on it.