P J Sheehan (Cork South West, Fine Gael)
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Question 81: To ask the Minister for Social and Family Affairs the position regarding the proposed reforms for the coverage of farm spouses as outlined in the Programme for Government; and if he will make a statement on the matter. [32288/07]

Martin Cullen (Waterford, Fianna Fail)
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The Programme for Government states that 'The role and economic contribution of spouses working on the farm will be better recognised within the social insurance system, following on from Budget 2007 which allowed recipients of Farm Assist to make PRSI contributions for the first time'.

Spouses working for self-employed contributors are specifically excepted from social insurance contributions. This exclusion recognises the practical difficulties in establishing the nature of a genuine employment relationship in circumstances such as when a person employed under a contract of service by his or her spouse is classed as an "excepted" contributor under social welfare law. As a result, farming spouses, in common with spouses of other self-employed persons, do not generally pay PRSI contributions. There are, however, three situations where spouses may pay contributions.

Spouses who are actively engaged in a commercial partnership, as opposed to simply being the joint owners of a property, are treated as individual self-employed contributors and are thus liable to social insurance contributions. These contributions — made under PRSI Class S — enable them to build up an insurance record in their own right and to receive accruing benefits. A partnership is commonly understood to be an association of two or more persons for the purpose of gain or of sharing in the work and profits of an enterprise. Liability for PRSI contributions is not contingent on the ownership of property but rather on the nature of the business arrangements between the couple. Co-ownership of property does not in itself create a partnership.

In the situation where a family business or farming enterprise is incorporated as a limited company, spouses involved in the business can establish a social insurance record as either employees or as self-employed contributors — depending on whether a contract of service exists.

Finally, a spouse engaged in "off-farm" employment, will pay social insurance contributions in his or her own right. This enables farming spouses who might otherwise not be insured to develop a social insurance record on the basis of their "off-farm" earnings.

While there are no plans to alter these provisions, an information leaflet is currently being developed between the Department of Social & Family Affairs and the Revenue Commissioners to set out the social welfare and tax implications of families co-working in a shared business. It has been agreed, with the farming representatives, that their views and input will feed into this process to ensure the new publication meets with their information needs and is customer orientated. It is hoped to publish the new information leaflet by end 2007.

It should also be noted that under the Programme for Government there is a commitment to improve the income limits associated with the qualified adult allowance to enable more people to qualify for it. The limits will be reviewed in the context of the budget.