Catherine Ardagh (Fianna Fail) | Oireachtas source

I thank Senators Butler and O'Reilly for bringing this motion before the House. It is very close to my heart as a self-employed individual. I thank the Minister for taking the time to address the House.

I am solicitor but, if I did not know better, I would believe I was an agent of the Revenue Commissioners. The taxes I collect include stamp duty, VAT, employer's PRSI, employee's PAYE, my own income tax, the local property tax, and the non-principal private residence charge. For all this tax collection, I would get no services from the State if anything were to happen to me. Obviously, I am now Senator so my circumstances have changed. However, had I not been elected, I would be in the same position as Senator Butler and would not have any of the supports in question available to me or my family.

In principle, Fianna Fáil supports this motion, and it has been at the forefront in highlighting that our PRSI system needs to be reformed to extend social welfare benefits to the self-employed. Fianna Fáil published a Bill on this issue and discussed it during Private Members' business in the Dáil in April 2015. We believe the commitment in A Programme for a Partnership Government to introduce an approved PRSI system for the self-employed should be realised over the coming budgets. However, while we support this motion in general and have been vocal in our belief that social insurance needs to be extended to the self-employed, we do not fully concur with the view in the Mangan report that jobseeker’s allowance payments provide adequate cover to self-employed people given the risks associated with unemployment and the recommendation that the extension of social insurance to the self-employed to provide cover for long-term illness, ill-health or incapacity should be on a compulsory basis. Instead, Fianna Fáil favours extending the full range of benefits, including jobseeker’s benefit, to the self-employed through an opt-in system as opposed to a compulsory system. On a phased and voluntary basis, we propose to extend a full range of social protection payments, including jobseeker’s benefit and illness benefit, to self-employed PRSI contributors as part of a commitment to fostering an entrepreneurial culture, in addition to enhancing social solidarity.

Fianna Fáil’s proposals are on the basis that the self-employed will be able to opt into the existing class A structure, paying the rate corresponding to their income level. We propose they should be able to continue to make class S payments, as they currently do. The additional payment would equate to 4% for the self-employed with an income above €356 per week. When a self-employed person is starting off, he or she does not have a massive income. One's income for the first year may be €12,000. Making it compulsory for self-employed people to opt into a system they may not be able to afford is unfair. That is why we favour the opt-in system.

As part of the programme of extending benefits, we propose that limited recognition be given for class S payments made to date by self-employed persons. This should be done in a way that balances the need to assist the self-employed sector with the requirement not to unduly burden the Social Insurance Fund. It is apparent that reform such as this is most needed as it is crucial that we actively encourage entrepreneurship. At present, a major disincentive to potential entrepreneurs considering starting a business is the threadbare social safety net. This is an active impediment to undertaking the risk inherent to creating new businesses.

Our welfare system should support existing businesspeople and budding entrepreneurs who will lead the way in job creation in their communities. The current arrangement for compulsory social insurance has been in place since 1998. The self-employed pay PRSI at the class S rate of 4%. They are covered for the State contributory pension, the widow's or widower's pension, the surviving civil partner pension, the guardian's payment, the maternity benefit and the adoptive benefit. The schemes to which the self-employed do not have access cover the jobseeker’s benefit, illness benefit, partial capacity benefit, invalidity pension, health and safety benefit, carer’s benefit, treatment benefit and additional injuries benefit, including the disablement benefit.

As part of Fianna Fáil’s Private Members' motion in April 2015, the party sought, on a phased and voluntary basis, to extend the full range of social protection payments, including jobseeker’s benefit, illness benefit and invalidity pension, to self-employed PRSI contributors as part of a commitment to fostering an entrepreneurial culture as well as enhancing social solidarity. The self-employed will be able to opt into the existing class A structure, paying the rate corresponding to their income level. They will continue to make class S payments, as they currently do. The additional voluntary payment will equate to 4% for the self-employed with income above €356 per week.

Extending social welfare protection to self-employed people achieves at least two objectives. First, it secures a measure of social justice. Second, it reduces the risk for those entrepreneurs who wish to start up their own business by providing a safety net. This makes perfect sense at a strategic level. Fianna Fáil is committed to building an indigenous sector based on small and medium enterprises. However, we must put in place structural reforms to do so. Providing social welfare support for self-employed people should be part of that process. We must make Ireland’s business environment fit for purpose and as attractive as is feasibly possible. We need to address the issues that make it difficult or too risky for individuals to start a business. We need to create an environment that is conducive and appealing to self-starters, an environment that has the potential to create further jobs and bring money into the economy, towns and villages. Reforming our social welfare system to allow self-employed people to opt in to the class A structure is a vital step towards making the starting of a business more attractive and less risky to entrepreneurs.