Mary Upton (Dublin South Central, Labour)
Link to this: Individually | In context

Question 927: To ask the Minister for Social and Family Affairs the discussions she has had with the Department of Finance regarding the situation whereby artists may get a large sum of money from a show once every couple of years, but have no discernible income for many other years and hence do not pay PRSI contributions so they may not be eligible for unemployment assistance or old age pensions; her plans to solve this tax issue which not only affects artists but other self-employed persons; and if she will make a statement on the matter. [32325/09]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
Link to this: Individually | In context

Self-employed people including artists 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 people pay, the practicalities of administering and controlling access to short-term payments and the annualised system of contributions that these same people 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.

Self-employed workers who do not qualify for an insurance-based benefit may establish entitlement to assistance-based payments such as Jobseekers Allowance. They 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 general their earnings level in the last twelve months is the basis for determining their expected income for the following year. However, in the current climate account is taken of the downward trend in the economy and it is accepted that future earnings may be lower than those of previous years. This is factored in projecting future earnings, with account being taken of the potential for significant upward or downward variations in income from one year to the next.

Similarly, any person who does not satisfy the social insurance contribution criteria for the State Pension (Contributory) may apply for the State Pension (Non-Contributory), the award of which is, inter alia, subject to a means test.

In addition, self-employed persons who are no longer covered by compulsory PRSI can opt to pay Voluntary Contributions if they meet the necessary requirements. Payment of Voluntary Contributions can help to maintain or improve an individual's contributory pension entitlement. Self-employed persons pay a special rate of Voluntary Contributions and the current amount payable is €253 per year.