Kathleen Lynch (Cork North Central, Labour)
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Question 56: To ask the Minister for Social and Family Affairs her plans to expand the range of income that is subject to pay related social insurance. [23293/09]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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Income chargeable to PRSI is, in general, defined in terms of income liable under Schedule E of the Income Tax Acts. Such income is generally derived from employment or self-employment.

This income base is appropriate to the social insurance system as it is consistent with the contributory principle of the of the social insurance fund, whereby a relationship is established between the employment or self-employment status and the rate of contribution payable and benefits or pensions receivable as a result of these contributions.

In common with many social insurance systems throughout the world, the system is not actuarially based but funded through a pay-as-you-go approach. Today's contributors support both past and current contributors while also ensuring their own future security by building up entitlement to later benefits and pensions and paying into a mechanism that redistributes income over one's own lifetime.

The range of income which is subject to PRSI is reviewed on a regular basis. Most recently in 2004 the exemption of non-pecuniary emoluments from the charge to PRSI was removed. As a consequence, subject to certain exemptions, benefits in kind are now subject to PRSI.

Any further revision of the PRSI base would be a matter for consideration by Government in a budgetary context.