Joe Carey (Clare, Fine Gael)
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Question 246: To ask the Minister for Social Protection the plans to reform the social welfare system to give greater social security for self-employed persons; and if he will make a statement on the matter. [46368/10]

Éamon Ó Cuív (Galway West, Fianna Fail)
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Self-employed people pay PRSI Class S contributions which provide cover for long-term benefits such as State pension (contributory) and widows/widowers pension (contributory). Employees are covered by PRSI classes A, E, H and P, which provide cover for the above benefits as well as for short-term contingencies such as jobseekers and illness benefits.

PRSI coverage is related to the risks associated with employment or self-employment, the annualised system of contributions for self-employed people and the practicalities of administering and controlling access to short-term payments. Self-employed people pay Class S contributions at a rate of 3% per annum, as compared to the 14.75% full Class A contributions paid by employees and their employers, to reflect the narrower range of benefits they receive. 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 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.

Self-employed workers who do not qualify for an insurance-based benefit may establish entitlement to assistance-based payments such as jobseeker's 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 means will take account of the level of earnings in the last twelve months in determining their expected income for the following year. In the current climate account is taken of the downward trend in the economy and the process recognises the potential for significant upward or downward variations in income from one year to the next.