Written answers

Tuesday, 7 November 2006

Department of Social and Family Affairs

Social Insurance

8:00 pm

Photo of Marian HarkinMarian Harkin (Sligo-Leitrim, Independent)
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Question 390: To ask the Minister for Social and Family Affairs the specific conditions required for payment of social insurance contributions for partners of self employed persons who are employed in running a family business; and if he will make a statement on the matter. [36464/06]

Photo of Marian HarkinMarian Harkin (Sligo-Leitrim, Independent)
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Question 391: To ask the Minister for Social and Family Affairs the specific conditions required for payment of social insurance contributions for partners of self employed persons who are involved in running a family business; and if he will make a statement on the matter. [36465/06]

Photo of Séamus BrennanSéamus Brennan (Dublin South, Fianna Fail)
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I propose to take Questions Nos. 390 and 391 together.

Where couples are actively engaged in a commercial enterprise as a business partnership, they are treated as individual self-employed contributors and are liable to social insurance contributions accordingly. These contributions enable them to build up an insurance record in their own right and to receive the accruing benefits. This would apply equally to married couples.

In situations where the common business is incorporated as a limited company, each of the couple 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 or not. Again, this is equally relevant to couples working together who are married.

However, where a person is in a marital-type relationship and working for the other in a common business, be it casually or on a more ongoing basis, the question as to whether PRSI Class A contributions would be due — as an employee — would depend on whether a contract of service exists. A contract of service implies that the worker is subject to direction, control and dismissal and brings with it rights, obligations and responsibilities on both sides. If it is determined that a contract of service exists, then, in general, Class A PRSI would be the appropriate class.

If a contract of service does not exist, there is scope for the activity to be considered to be a contract for services, with each of those in the business to be considered to be self-employed and insurable at PRSI Class S. By contrast, where a person is employed under a contract of service (i.e. as an employee) by his or her spouse, the employment is specifically excluded from PRSI liability and the worker is viewed as an 'excepted' contributor under social welfare legislation.

I am satisfied that where formal employment or partnership relationships are intended between spouses, or couples in a marital-type relationship, the legislation provides the scope necessary, as outlined above, to allow parties to enter into arrangements that will enable them to gain access to social insurance coverage.

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