Tuesday, 14 December 2010
Department of Social and Family Affairs
Question 235: To ask the Minister for Social Protection if, in view of the equalisation of PRSI rates paid by employees and the self-employed as announced in budget 2011, self-employed workers will be entitled to claim jobseeker's benefit; and if he will make a statement on the matter. [47218/10]
In 2011, self-employed workers will be liable for PRSI at the Class S rate of 4% - the same personal rate as is paid by ordinary employees.
However, employers also make a PRSI contribution of 10.75% in respect of their employees, resulting in the payment of a combined 14.75% rate per employee under full-rate PRSI Class A. As a result, ordinary employees can build entitlement towards the full range of social welfare benefits. Class S contributions will continue to provide cover for long-term benefits such as state pension (contributory) and widow's/widower's pension (contributory) only.
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 payment for self-employed people. A system of separate arrangements for employed and self-employed workers within a social insurance context is common in other European social protection systems.
It may also be noted that the 2005 Actuarial Review of the Social Insurance Fund, found that the fund favours the self-employed over the employed when both employer and employee contributions are included in respect of the employed person. The analysis demonstrates that, despite the fact that they are eligible for a narrower range of benefits, self-employed persons can gain substantially more from the fund than employees.
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 in the context of a much more significant rise in the rate of contribution payable.