Bernard Durkan (Kildare North, Fine Gael)
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Question 216: To ask the Minister for Social and Family Affairs his plans to facilitate both owners of property who currently make self-employed contributions with a view to pension payment to both as opposed to at present, payment to one or either; and if he will make a statement on the matter. [31258/05]

Séamus Brennan (Dublin South, Fianna Fail)
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I understand the Deputy is referring to the position of the PRSI contributions payable by couples in relation to farming activities. Under social welfare legislation, the social insurance status of spouses in a family business, including farming, can vary. Broadly speaking there are three different scenarios to be considered.

First, where spouses are actively engaged in farming or any other enterprise as a business partnership, as opposed to simply being joint owners of a property, they are treated as individual self-employed contributors and are liable to social insurance contributions. These contributions enable them to build up an insurance record in their own right and receive accruing benefits. A partnership is commonly understood to be an association of two or more persons for the purpose of gain, or sharing in the work and profits of any enterprise. Liability for PRSI contributions is not contingent on the ownership of property but rather the nature of the business arrangements between the couple. Co-ownership of property does not of itself create a partnership.

Second, where a family business in incorporated as a limited company, spouses involved in the business can establish a PRSI record either as employees or as self-employed contributors depending on whether a contract of service exists.

Third, a person employed under a contract of service, that is, as an employee, by his or her spouse is an "excepted" contributor under social welfare legislation. The exceptions apply to both men and women in family employments and recognise the practical difficulties in establishing the nature of a genuine employment relationship in such circumstances.

Where formal employment or partnership relationships are intended between spouses or assisting relatives, the legislation provides the scope necessary, as outlined above, to allow parties enter into arrangements which enable PRSI contributions to be payable.

The issue of the insurability of farm spouses for social insurance purposes has been considered on a number of occasions. An interdepartmental group chaired by the Department of Agriculture, Food and Rural Development, concluded in 2002 that "the formation of business partnerships offers an immediate route of access to social insurance cover as it is based on existing legislation. Such arrangements would not impose any significant additional administration costs on farm businesses; for example, couples who are liable for income tax under joint or separate assessment will continue to make one income tax return each year, the only change being that the income of the farm enterprise will be apportioned in accordance with the partnership arrangements".

A social partnership group addressing issues relating to a fully-inclusive social insurance model, FISIM, which included representatives of the farming organisations, considered how the social insurance system should develop to be more inclusive in its approach to this issue. Its report, published in June this year, acknowledged the significance of the partnership option and recommended that more information on the tax and social welfare implications of families working in a partnership or as a limited company should be available. This recommendation is being progressed.