Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Question 162: To ask the Minister for Social and Family Affairs her views on a review of the way in which the governing contribution year applies, particularly with regard to C2 workers, many of whom were forced into becoming C2 certificate holders and who now face unemployment without access to social welfare payments. [34845/08]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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The Pay-Related Social Insurance (PRSI) system is based on both the "contributory" and "solidarity" principles. The former principle provides that there is a direct link between the amount of contributions that a person pays into the system and their subsequent entitlement to a varying range of benefits that are payable if and when particular contingencies arise.

The 'governing contribution year' criteria applying to various benefit schemes act as an administrative expression of this principle. As such the criteria provide a mechanism whereby entitlement to a benefit is determined, inter alia, by reference to a particular recent contribution year. At present, this is the 2006 tax year. Any move to extend the criteria to cover a greater number of years would necessarily dilute the contributory principle on which the PRSI system is based.

Self-employed workers, including C2 certificate holders, 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.