Joan Burton (Dublin West, Labour)
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Question 16: To ask the Minister for Social and Family Affairs her views on introducing a temporary holiday, either full or partial, on the payment of employers' PRSI as a means to create, sustain and protect jobs; and if she will make a statement on the matter. [12299/09]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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The vast majority of workers pay social insurance contributions at the PRSI Class A rate. These general employees, 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.

Traditionally, social insurance spending has been funded on a tripartite basis – with contributions coming from the Exchequer, employers and employees. Employer contributions make up some 75% of income to the social insurance fund, with most such contributions arising from full-rate PRSI Class A. Reducing PRSI in order to support vulnerable employment would be an inefficient measure, as employments that did not require such support would also benefit, given the difficulties in targeting any reduction.

The Exchequer is the residual financier of the social insurance fund and any consideration of a reduction, even on a temporary basis, in employer PRSI would have to occur in a budgetary context. Such consideration would include the effect of any such change on the financial position of the social insurance fund. The fund, having recorded a surplus of income over expenditure since 1995, recorded a deficit in 2008. A further shortfall is expected this year and although these current deficits can be met from the accumulated surplus, it is likely that the Exchequer may again have to subsidise expenditure from the Social Insurance Fund within a few years. Given that context, a more targeted approach is required.