Gay Mitchell (Dublin South Central, Fine Gael)
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Question 57: To ask the Minister for Social and Family Affairs his views on whether the social welfare system here discriminates against the self-employed; and if he will make a statement on the matter. [17678/06]

Séamus Brennan (Dublin South, Fianna Fail)
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The Irish social protection system provides significant access and coverage for insurance based and means tested payments for employed and self-employed workers in the event of a range of contingencies arising. The level of coverage available to self-employed workers has increased particularly significantly since the Commission on Social Welfare in 1986 recommended thatsocial insurance coverage should be extended to self-employed workers. The social insurance system in Ireland is based on the payment of compulsory PRSI contributions to the Social Insurance Fund, in return for which, and subject to the fulfilment of certain prescribed conditions, contributors become eligible for a range of income-replacement benefits. Where both may be eligible for a particular benefit, the same contribution conditions apply to both employed and self-employed workers without discrimination. Workers are insured under the Social Welfare Acts as either employed or self-employed contributors. Employees and their employers generally pay contributions at PRSI Class A at 14.05 per cent of reckonable earnings whereas self-employed individuals pay approximately one fifth of this at 3 per cent of reckonable income. Self-employed contributors may accrue entitlement to Widow's/ Widower's (Contributory) Pension, Orphan's (Contributory) Allowance, Old Age (Contributory) Pension, Maternity Benefit, Adoptive Benefit and the Bereavement Grant under the same contribution conditions that apply to employed contributors.

Self-employed workers are not, however, insured against short-term benefits such as unemployment and disability benefits, nor can they claim credited contributions during breaks in their working activity. These limitations reflect the nature of the need for coverage for various contingencies, the rate of contributions which the self-employed are paying, the practicalness of administering and controlling access to short-term payments and the annualised system of contributions for the self-employed. A system of separate arrangements for employed and self-employed workers in a social protection context is not exceptional by comparison to other European social protection systems.

Self-employed workers also enjoy enhanced access to the old age (contributory) pension over their employed counterparts. A special pension, payable at 50 per cent of the standard maximum rate, is available since 1999 to self-employed persons who were aged 56 or over in 1988, when social insurance cover was extended to them and who are unable to satisfy the standard qualifying condition of commencing social insurance payments ten years prior to attaining pension age.

All social assistance payments, other than FIS, are equally available to both the self-employed and workers or former workers. Eligibility depends on satisfying the relevant scheme conditions such as unemployment or disability and all social assistance schemes are means tested. In this regard, there are a number of targeted earnings and income disregards depending on the individual scheme and the needs of individual groups experiencing the relevant contingency. Some are available to employees only, some to the self-employed only and some to both groups.

The self-employed also benefit from enhanced arrangements in relation to the Back to Work Allowance. While the allowance is payable for a period of three years to persons taking up employment, it is available for four years for those taking up self-employment, including a first year entitlement to 100%, in comparison with 75% for employees, of the relevant rate of their qualifying payment.

Finally, universal payments such as Child Benefit and the Early Child Care Supplement are available to all qualified persons, regardless of employment status. In all, I consider that these arrangements are not discriminatory and represent a positive and reasonable response to the social security requirements of self-employed workers which recognize the nature of and occasional fluctuations in annual income and their need for protection and income security as it arises. There are no immediate plans to alter the arrangements outlined above.