Joan Burton (Dublin West, Labour) | Oireachtas source

I was asked whether self-employed people benefit from PRSI. The benefits have been shown by the OECD and the recent actuarial review of the Social Insurance Fund by KPMG. This was not work by the Department of Social Protection or the Revenue Commissioners but was independently done. Given the benefits they acquire, which are broadly maternity benefit, widow's, survivor's and retirement pensions, the 4% contribution by self-employed people represents some of the best value that the social insurance system offers to any contributor.

Senator Mooney spoke about people who were formerly self-employed who may even have employed other people and paid employer PRSI contributions. The advisory group, chaired by the barrister, Ms Ita Mangan, did considerable research on this. What we found will be backed up by what many Senators, who have dealt with cases on the ground, will know. The advisory group report found that approximately 85% of the 20,000 self-employed people, who claimed the means-tested jobseeker's allowance during the worst three-year period of the crash following the bank guarantee in 2008 from the beginning of 2009 to 2011, actually got jobseeker's allowance. In other words, even though the self-employed do not pay a contribution of 14.75%, which employed people pay - 4% employee contribution and 10.75% employer's contribution - since I became Minister we have allowed self-employed persons or indeed farmers who have had a catastrophic fall in income to prepare accounts of their current financial position whereas with the previous Government they relied on previous years' accounts.

The crash really began in 2008 and accelerated particularly during 2009 and 2010. Many people in those days looking for some social welfare support did not qualify for jobseeker's allowance. Senators will recall the sad stories of such people who were broke having to go and get accountants to redo accounts. We have changed that, including for farmers which was important in the context of the farming crisis experienced earlier this year and at the end of last year, to allow people to bring in current financial information. We do not require them to go off and get expensive accountants. They can go to their local social welfare office and bring their details there. The situation Senator Mooney has described no longer applies and we have the figures from the advisory committee showing that 85% of the 20,000 formerly self-employed people got jobseeker's allowance.

Why would a person not qualify? It might be because his or her spouse was in employment or had another occupation or business with income above the means-test limits. However, that particular situation was one of the terrible features we discussed with people during the 2011 general election campaign. I remember visiting Letterkenny and talking to people who had worked in construction and may have employed a few people. Some of them lived in big houses which needed to be heated and they were trying to pay the mortgage even though everything had crashed around them. I was very influenced by that and when I became Minister I was determined to make the change to allow them to be assessed on a current account basis, which is in effect as we speak.

Therefore, if I were to ask Senators, they would agree that they do not hear the level of distress experienced by people in those situations who try to get social welfare support. As I said, in some cases their spouses might have significant other means.

I shall return to another question on principles. The Revenue Commissioners administer a scheme that exempts the first €3,174 of income. People may say, in the context of interest, that the provision is not terribly significant. However, it is an important allowance. For instance, a person who earns an income from their employment, trade or profession pays PRSI on the gross amount. Why should somebody with an income from other sources, and in this case it is interest, be put in a more favourable position than somebody at work who pays PRSI on his or her gross income?

Yesterday, I listened very carefully to the Second Stage speeches and Senators emphasised repeatedly the importance of retirement pensions and those of widows and widowers. If we are to fund these, we must have a fund of money, and in Ireland that is the social Social Insurance Fund. It went into catastrophic deficit as a consequence of the crash, which is exactly what Senator Mooney talked about. We have now got the fund on a path to recovery and stability. If we grow and maintain the fund over the next period and right up to 2050, we will ensure every retired person in the country has an appropriate retirement pension. Not only that, it is one of the reasons that I, as a Minister, can tell older people who are retired that I can maintain - and have maintained - the basic weekly rate of retirement pension.

The amendment proposes the expansion of the PRSI base and will maintain the contributory pensions. I think I said to people yesterday that we must spend an extra €190 million this year due to an additional number of older people qualifying for retirement pensions. We must absorb that provision in our costs for this year and next year and, therefore, must increase the base. The amendment allows for a small and moderate increase in the base of the Social Insurance Fund.