Tuesday, 18 June 2019
Nithe i dtosach suíonna (Atógáil) - Commencement Matters (Resumed)
Social Welfare Code
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.
I thank the Minister for his response, the last paragraph of which is most telling. First and foremost, I will be exercising my right, following a High Court case, to be moved to class S. Second, I object to this nonsense about "generous Exchequer funded salaries and pensions". My pension, were I to lose my seat at the next election, is the princely sum of €8,000. However, because I am a teacher my pension will be on the single pension scheme so there is no "generous" pension for me. The Government must deal with the problem it has with other class K contributors who have unearned income like shareholders, people who have rental income and the like. I have no terms and conditions of employment; nor have any of my colleagues. We are officers of the State. I assure the Minister and the Department of Employment Affairs and Social Protection that if they think I am going to sit down under this, they can think again. If I have to go back to the High Court, I will do so and by God, the next time I go back, they will pay dearly for it.
This is an outrageous statement on the part of the Department. I appreciate that this is not from the Minister for Education and Skill's Department but it is outrageous. There are young people in these Houses whose PRSI records are being destroyed. The departmental reply refers to "generous Exchequer funded salaries and pensions" which is a load of poppy cock. We all know that the days of great pensions in the civil and public service, particularly for elected members, are long gone. If anyone thinks I am going to take this nonsense, he or she can think again. I will be back on this one. I am sorry for giving it to Deputy McHugh between the eyes. He is the Minister for Education and Skills and it is to him I will be going when I finish up in this House. Half of my teacher's pension is made up of my class A PRSI contributions but my contribution record has been broken by the Oireachtas class K designation. I have no idea where my teacher's pension will end up as a result of this so rock on - I am on the way back on this one.
In terms of the education component on a general level, participating in this debate has been an education in and of itself. If there are any specific education related matters, I am more than happy to facilitate a communication plan in that regard. The next budget is scheduled for 8 October. There will be a lot of deliberations and conversations on where we are going in regard to that budget. The approach to that budget will be in keeping with the challenging times ahead in terms of heightened expectations, lower growth rates and Brexit. In the context of the specific issue raised by Senator Craughwell on class K PRSI, I am sure conversations will be happening within the Department of Employment Affairs and Social Protection in advance of the budget.