Written answers

Wednesday, 2 April 2008

Department of Social and Family Affairs

Tax and Social Welfare Codes

9:00 pm

Photo of James BannonJames Bannon (Longford-Westmeath, Fine Gael)
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Question 552: To ask the Minister for Social and Family Affairs if he will give assurances that clear criteria are to be laid down to determine whether a partnership in a family farm exists; if same will be used to provide a pension for farm spouses; and if he will make a statement on the matter. [11358/08]

Photo of James BannonJames Bannon (Longford-Westmeath, Fine Gael)
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Question 553: To ask the Minister for Social and Family Affairs if spouses who were in a partnership but did not claim partnership when making tax and PRSI returns will be assured of retrospective recognition of partnership; and if he will make a statement on the matter. [11359/08]

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Question 557: To ask the Minister for Social and Family Affairs the pension entitlement of both partners in a business; and if he will make a statement on the matter. [11547/08]

Photo of Martin CullenMartin Cullen (Waterford, Fianna Fail)
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I propose to take Questions Nos. 552, 553 and 557 together.

The Programme for Government states: "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".

There are three situations where spouses may pay contributions. Spouses who are actively engaged in a commercial partnership, including the operation of a farm, 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. Under the provisions of the Towards 2016 social partnership agreement, 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. The views and input of the farming representatives have fed into this process to ensure that the new publication meets with their information needs and is customer orientated. The leaflet will be published shortly. 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.

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