Alice-Mary Higgins (Independent) | Oireachtas source

I commend Senator Ray Butler for tabling the motion. I also welcome the Minister.

A number of positive measures have been proposed in the motion. I note that the programme for Government includes a commitment to close the gap between the earned income credit and the PAYE tax credit. This is a positive proposal, primarily because these are flat tax credits which have the potential to benefit self-employed persons on lower incomes more than others because any increase in the tax credit would make more of a difference to them. It is important to maintain this principle by providing tax credits rather than tax reliefs.

I support the recommendations made in the Mangan report on this issue and it is good that they are being advanced. However, we must also pay attention to the language used in the report. It is important to be a little more rigorous and avoid using language that suggests the self-employed do not get anything. As the Mangan report made clear, while this perception is common, it is not accurate. For example, 20,000 claims for the means-tested jobseeker's allowance were made by self-employed persons between 2009 and 2011, of which 85% were successful. It is important, therefore, that the language used in this debate be accurate and avoid creating an unnecessary divide.

In terms of the concrete measures proposed in the Mangan report, the document is nuanced and thoughtful. For example, it examined the means-tested jobseeker's allowance and found it to be an adequate measure, while also identifying that long-term sickness and injury cases were not adequately served under the current system. The report recommends an increase in contributions to deal with the issues of invalidity, partial capacity and disability payments. I note also that the report identifies 1.5% as the minimum increase in contributions required if self-employed persons are to be allowed to access benefits in the manner proposed. It is important to bear in mind that the report also proposes moving towards increasing the rate of PRSI paid by the self-employed to 5.5%. We must keep on track to reach the 5.5% target and achieving it would mean ensuring we would not stall when it reached 4.5%.

I agree with previous speakers who argued that PRSI rates for the self-employed must be decoupled from the universal social charge. It is important not to mix up the USC and employee contributions by linking the former with any increase in contributions by self-employed persons. We are discussing measures specifically related to PRSI and should focus entirely on that issue.

On payment levels, it is a matter of concern that Ireland has one of the lowest levels of income from PRSI in Europe. The 14.5% PRSI rate for PAYE workers which is split between employees and employers at 4% and 10.75%, respectively, is much higher than the proposed self-employed PRSI contribution of 5.5%. While I support the motion, it is important to bear this differential in mind because we must not hollow out the revenue generated from PRSI. We should also consider other measures or areas to generate increased income from PRSI. Organisations such as TASC have made proposals in this regard and perhaps these might be examined in the future.

I have one other concern which presents an argument both for and against the motion. All available evidence shows that the level of bogus self-employment is on the rise. While we have heard about entrepreneurs and risk takers, there are other workers who have risk thrust on them. For instance, construction workers and lone providers of services for a single employer are frequently in self-employment. Only two weeks ago, the House discussed legislation which included measures to strengthen collective bargaining and the rights of freelance and self-employed workers. I hope the Bill in question will receive Senators' support when it is brought before the House again.That argument about bogus self-employment makes the case that this is extremely necessary because many people can find themselves in very vulnerable positions. It is important that the position be monitored and tracked in order to ensure people do not come under pressure from employers to register as self-employed in order to lower the overall PRSI contributions being made. This is an issue to monitor carefully, and I know Senator Butler is aware of that concern.

We talk about voluntary contributions, an issue which impacts upon many of the same people who are affected by these matters. We have seen the huge obstacle of voluntary contributions added to this in that it has become more difficult to make these contributions in recent years. The number of previous contributions that need to have been made has almost doubled to 520. This is an issue that affects the self-employed but it also strongly effects women, for example, those returning to the workplace. We also see that those who, like me, have moved between self-employed and employee status can find themselves trapped in a self-employed status from where it is difficult to make up those gaps in higher-rate contributions that would allow them to have an adequate pension. This issue should be examined in tandem with the others to which I refer by the social protection committee.

The final part of the motion refers to the importance of the equality of conditions for self-employed and PAYE workers. I remind the House of the commitment to gender equality and I urge that there be full gender-proofing of these proposals. With reference to gender equality and as we look to the idea of a new social welfare stamp that allows for the contributions of the self-employed, we might also revisit the question of a care credit which, again, is a stamp that would recognise the contribution made by carers in our system. That would be part of an overall reform within social protection.

I commend Senator Butler on introducing the motion. I look forward to the issues involved being discussed in more detail at the social protection committee and to their being progressed.