Brian O'Shea (Waterford, Labour)
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Question 76: To ask the Minister for Social and Family Affairs the number of personnel in the construction industry who are employed on the basis of the C45 system; his views on the fact that workers employed on this basis do not have entitlement to various benefits that persons who pay the normal A1 stamp contribution are entitled to; if this system of employment in the construction industry means that such persons so employed or their spouses are not entitled to optical or dental benefits; and if he will make a statement on the matter. [23025/05]

Séamus Brennan (Dublin South, Fianna Fail)
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The C45 system is the term used commonly in referring to the collection of income tax by the Revenue Commissioners through the relevant contracts tax or RCT system. It applies when payments are made by a principal contractor to a sub-contractor in respect of "relevant operations" in the construction industry, the meat processing industry and certain areas in the forestry industry. Tax is deducted by a principal contractor on payment to a sub-contractor, unless the principal contractor has received a relevant payments card for a sub-contractor who is registered with the Revenue Commissioners and holds a C2 card accordingly.

Where tax is deducted, the principal contractor gives the sub-contractor a certificate — previously a form C45, now replaced by a form RCTDC — which the sub-contractor uses to claim credit for or repayment of the tax. Social insurance contributions continue to be collected through the self-assessment system. As this system operates as part of the tax collection system, data on the numbers working sectors under these arrangements are not available in my Department.

This system of tax collection only operates where the principal contractor and the sub-contractor have signed a declaration agreeing that the contract is not a contract of employment, that is, that an employer-employee relationship does not exist. Whether a person is working as an employee or in a self-employed capacity is determined by reference to a range of objective criteria which arise from case law. These criteria are outlined in the information leaflet Employed or Self-Employed — a guide to Tax and Social Insurance, which is published jointly by the Revenue Commissioners and my Department, as well as in the guides on relevant contract tax published by the Revenue Commissioners. A worker who is unsure of his or her employment status, or a representative such as a trade union, may request a formal determination from Scope section in my Department of the nature of the contract.

Self-employed workers using the RCTDC, in common with other self-employed workers, are compulsorily insured under the Social Welfare Acts at PRSI class S. Subject to an adequate insurance record, they are eligible for the following payments: widow's or widower's contributory pension, orphan's contributory allowance, old age contributory pension, maternity benefit, adoptive benefit, bereavement grant.

Contributions paid by self-employed persons at PRSI class S are not reckonable for any short-term benefits including dental or optical benefits. To extend the range of benefits payable would mean an appreciable increase in the rate of contributions and would have to be considered in a budgetary context.