Joe McHugh (Donegal, Fine Gael) | Oireachtas source

Gabhaim buíochas leis an Seanadóir fá choinne na ceiste. Bhí an ceart aige faoin Aire atá freagrach as an cheist seo. Tá sé as láthair ag an bhomaite. Tá brón orm fadúda sin ach má eíríonn aon cheist as an fhreagra seo, beidh mé sásta teagmháil a dhéanamh le mo chomhghleacaí chun aon bhearna a líonadh nó sonraí a fháil.

In 2011, public officeholders became liable to pay class K PRSI of 4% on their officeholder income. Payment of the class K PRSI charge does not establish any social insurance entitlements. Prior to 2011, this income was exempt from PRSI and then, as now, social insurance entitlements were established and protected based on their non-officeholder activities or by paying voluntary contributions. This class K charge was introduced for public officeholders because, unlike employees and the self-employed, they did not pay a 4% contribution on this income. With the abolition of the PRSI earnings ceiling for employees in 2011 and the introduction of the 3% universal social charge on self-employed earnings over €100,000, also in 2011, this meant that public officeholders had a lower marginal rate of income tax, universal social charge and PRSI when compared with other workers. As a measure of solidarity with those workers, the Oireachtas voted to apply the 4% class K contribution to public officeholders.

Public officeholders are now not the only group paying class K contributions. Since 2013, modified rate contributors, including civil and public servants recruited prior to 1995, who also have earned and unearned income from self-employment pay class K PRSI on this previously exempt income. In 2014, class K was applied to the previously exempt income of employees and occupational pensioners under 66 years where they have unearned income only. These class K charges yield nearly €40 million per annum for the Social Insurance Fund from over 88,000 contributors.This would have a significant impact on the future health of the Social Insurance Fund.