Denis Naughten (Roscommon-South Leitrim, Fine Gael)
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Question 365: To ask the Minister for Social and Family Affairs his views on the fact that a person who pays a D stamp contribution is prohibited from paying S stamp contributions on farm earnings; his plans to rectify this situation; and if he will make a statement on the matter. [23787/07]

Martin Cullen (Waterford, Fianna Fail)
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Workers are insured under the Social Welfare Acts as either employed or self-employed contributors. All workers, both employed and self-employed, are obliged to pay PRSI contributions as a percentage of their personal reckonable income. These contributions provide entitlement to a range of contingency-based payments under various social insurance schemes — including pensions.

Employments that are insurable at PRSI Class D are classified as modified employments. PRSI Class D provides social insurance coverage for permanent and pensionable employees in the public service — other than those who were recruited after 6 April, 1995, or doctors and dentists employed in the Civil Service, Gardaí, commissioned army officers and members of the Army Nursing Service. Contributors insured at PRSI Class D are not eligible for social insurance-based pensions on retirement. This reflects the reduced rate of social insurance contribution that these workers have been paying (i.e. 3.25% as opposed to employees, who, together with their employers, pay a total social insurance contribution of 14.05% under PRSI Class A — excluding levies) and the fact that modified employments are covered under Civil Service regulations for both sick pay during illness and occupational pensions. As such, social insurance protection for these payments is not required. These regulations also stipulate that modified employments cannot, by their nature, be tied to any scheme that builds additional entitlement to short-term benefits and contributory pensions.

It should also be noted that under Section 4 of the Social Welfare (Consolidation) Act, 2005, any employment specified in regulations as being of such a nature that it is ordinarily adopted as subsidiary employment only and not as the principal means of livelihood is to be an excepted employment. Such employments are insurable at Class J and consequently are covered for occupational injuries only. As a result, as mentioned by the Deputy in his question, a modified contributor is prohibited from simultaneously paying PRSI Class S contributions, or any other rate of social insurance contribution, on farm earnings. There are no plans at present to review or alter the arrangements outlined above.