Joan Burton (Dublin West, Labour)
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Question 436: To ask the Minister for Social and Family Affairs the estimated annual cost to the Exchequer of a reduction of the PRSI rate of 4% to 2% for employees and the abolishment of the PRSI ceiling for such employees; and if he will make a statement on the matter. [12813/07]

Joan Burton (Dublin West, Labour)
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Question 437: To ask the Minister for Social and Family Affairs the estimated annual cost to the Exchequer of a reduction of the PRSI rate for self employed persons from 3% to 2%; and if he will make a statement on the matter. [12814/07]

Séamus Brennan (Dublin South, Fianna Fail)
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I propose to take Questions Nos. 436 and 437 together.

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.