Leo Varadkar (Dublin West, Fine Gael)
Link to this: Individually | In context

Question 131: To ask the Minister for Social and Family Affairs the PRSI benefits available to employees which are not available to the self-employed; the reasons for this anomaly; and if he will make a statement on the matter. [12607/08]

Martin Cullen (Waterford, Fianna Fail)
Link to this: Individually | In context

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.

Self-employed workers aged between 16 and 66 years and with reckonable income that exceeds the current insurable limit of €3,174 per annum pay social insurance contributions at PRSI Class S. These contributions are due at 3% of reckonable income, or €253, whichever is the greater.

PRSI Class S contributors are entitled to the following payments: the Widow's or Widower's (Contributory) Pension; the Guardian's Payment (Contributory); the State Pension (Contributory); Maternity Benefit; Adoptive Benefit, and; the Bereavement Grant.

The range of benefits and pensions to which different groups of workers may establish entitlement reflects the risks associated with the nature of their work. This in turn reflects the rate of contribution payable. Self-employed persons are liable for PRSI at the Class S rate of 3% and are consequently eligible for a narrower range of benefits than general employees who, together with their employers, pay a total social insurance contribution of 14.05%, excluding levies, under the full-rate PRSI Class A.

Self-employed workers are not insured against short-term benefits such as illness and jobseeker's payments — these are only available to persons covered by PRSI Classes A, E, H and P. This reflects the need for coverage for various contingencies, the rate of contributions that self-employed persons pay, the practicalities of administering and controlling access to short-term payments and the annualised system of contributions that these same persons enjoy. A system of separate arrangements for employed and self-employed workers within a social insurance context is common in other European social protection systems.

There are no immediate plans to extend cover for short-term benefits to this group of insured workers. Any such measure would have significant financial implications and would have to be considered within a budgetary context. Consideration would also have to be given to an appropriate increase in the rate of the PRSI Class S contribution. Class S contributors who do not qualify for an insurance-based benefit may establish entitlement to assistance-based payments by satisfying certain conditions — including a means test.