Leo Varadkar (Dublin West, Fine Gael)
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Question 132: To ask the Minister for Social and Family Affairs the number of tax-payers who pay the 0.9% PRSI rate; the basis for this lower rate; if the benefits differ from those paying the standard rate; and if he will make a statement on the matter. [12608/08]

Martin Cullen (Waterford, Fianna Fail)
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Permanent and pensionable employees in the public and civil service (including registered doctors and dentists, Gardaí, commissioned army officers and members of the Army Nursing Service) who were recruited prior to 6 April, 1995 are liable for a 0.9% modified social insurance contribution on their pay under PRSI Classes B, C or D. This entitles them to the following payments — subject to them having the required number of PRSI contributions: the Widow's or Widower's (Contributory) Pension; the Guardian's Payment (Contributory); Occupational Injuries Benefits (PRSI Classes B and D only); the Bereavement Grant, and; Carer's Benefit.

According to the most recently published estimates, from 2005, of the number of persons in each social insurance class, a total of 119,997 contributors are liable for a 0.9% modified social insurance contribution on their pay under PRSI Classes B, C or D.

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 determines the rate of contribution payable. Persons with earnings from Classes B, C or D employments are liable for PRSI at the lower modified insurance rate of 2.35% by the employer on top of the 0.9% payable by the employee — a total of 3.25% excluding levies. They are potentially eligible to 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. This reduced rate of contribution reflects the fact that employments covered at the modified rate offer permanent and pensionable positions to their staff members. As such, these workers are covered by their employer for both sick-pay during illness and occupational pensions. Social insurance protection for these payments is therefore not required.

The issue of social insurance coverage for public and civil servants was examined by the Commission on Social Welfare in 1986. While recommending that these workers be liable for full social insurance contributions and entitled to benefits, it acknowledged that this would be a matter for discussion through normal employer/labour channels. In 1994, the Government announced that full-rate PRSI would be extended to employees in the public sector generally and that staff interests would be fully consulted. Following extensive negotiation, the revised system of coverage that was brought in with effect from April, 1995, was applicable to new recruits only. There are no plans at present for a further review of the PRSI position of public and civil servants.