Seán Sherlock (Cork East, Labour)
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Question 45: To ask the Minister for Social and Family Affairs her estimate of the impact of the changes in the Social Welfare Bill 2009, on the likelihood of the Social Insurance Fund requiring support from the Exchequer in 2009. [16973/09]

Martin Ferris (Kerry North, Sinn Fein)
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Question 65: To ask the Minister for Social and Family Affairs the rationale behind limiting the PRSI ceiling to €75,036; and if she will make a statement on the matter. [16965/09]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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I propose to take Questions Nos. 45 and 65 together.

Under the PRSI system social insurance contributions are compulsorily payable by employers and employed and self-employed workers. Approximately 76% of workers pay PRSI Class A and Class H at the rate of 4% and accrue entitlement to a range of benefits and pensions under various social insurance schemes.

The PRSI ceiling for ordinary employees is one of a range of balancing measures between the two fundamental principles on which the PRSI system is based: the contributory principle whereby there is a direct link between contribution paid and entitlement to a varying range of benefits and pensions which are payable as a right, if and when particular contingencies arise; the solidarity principle whereby contributions paid by insured persons are not actuarially linked to benefits but redistributed to support contributors who are more vulnerable. It is an expression of solidarity between both earning groups and generations.

The retention of the PRSI ceiling ensures that those on higher incomes will support contributors who are more vulnerable but also provides that high income earners will achieve good value for their contributions in line with the contributory principle. The PRSI system is strongly redistributive and the increase in the ceiling in the supplementary budget 2009 further strengthens this whilst still ensuring that higher income earners continue to gain value for their contributions.

It may be noted that the "Actuarial Review of the Social Insurance Fund, 2005" report, published in 2007, found that paying social insurance contributions represents very good value for money in almost all circumstances. In particular, the report found that those on lower incomes fare considerably better than those on higher incomes, with persons earning less than the gross average industrial wage paying 35% of the contributions but receiving 66% of the benefits. Additionally, it is not expected that the Social Insurance Fund will require Exchequer funding in 2009. It is also estimated that the raising of the ceiling will yield an additional €69 million in contribution income in 2009.