Joe McHugh (Donegal North East, Fine Gael)
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Question 335: To ask the Minister for Social and Family Affairs the position regarding self-employed workers' entitlements; and if she will make a statement on the matter. [7636/09]

Joe McHugh (Donegal North East, Fine Gael)
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Question 336: To ask the Minister for Social and Family Affairs her position on self-employed workers' entitlements; if she will refer specifically to the entitlements of self-employed workers whose working week has been cut from five or six days to three days due to economic difficulties; and if she will make a statement on the matter. [7642/09]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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I propose to take Questions Nos. 335 and 336 together.

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. 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 aged between 16 and 66 years 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. These contributions provide entitlement to a range of contingency-based payments under various social insurance schemes. 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.

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.

Self-employed people can apply for the means-tested Jobseeker's Allowance if their business ceases or if they are on low income as a result of a downturn in demand for their services. In this context, it may be noted that entitlement to Jobseeker's Allowance for a self-employed person is primarily based on means, as opposed to the number of days being worked.

Their means would be taken as any net profit that they will earn in the coming 12 months. While their income from the previous twelve months is used as an indication in estimating their likely future earnings, it is not simply assumed that the previous year's earnings will be received in the coming year. Instead, account is taken of the potential for significant upward or downward variations in income from one year to the next.