Ruairi Quinn (Dublin South East, Labour)
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Question 197: To ask the Minister for Social and Family Affairs the cost to the Exchequer in terms of revenue foregone of cutting the PRSI from 4% to 2% for employees and from 3% to 2% for the self-employed; the additional revenue that would accrue from the abolition of the income ceiling for PRSI payments; and if he will make a statement on the matter. [12243/07]

Séamus Brennan (Dublin South, Fianna Fail)
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Approximately 76 per cent of workers pay PRSI Class A at the rate of 4 per cent. A further 11 per cent of workers pay social insurance contributions at the Class S rate. These contributions which are subject to various thresholds, allowances and ceilings, accrue entitlement to a range of benefits and pensions under various social insurance schemes. The current employee PRSI ceiling stands at €48,800 per annum.

It is estimated that a decrease in the employee PRSI rate from 4% to 2% would reduce Social Insurance Fund income by some €720 million in a full year. The abolition of the PRSI ceiling for ordinary employees would yield some €295 million in additional contribution income. A decrease in the self-employed PRSI rate (Class S) from 3% to 2% is estimated to cost approximately €220 million in a full year. Of course if introduced as a package, the combination of measures could give rise to a compound effect. Revisions to PRSI rates and the employee ceiling are considered annually in a budgetary context, with changes incorporated into the Social Welfare (Consolidation) Act, 2005, as required.