Leo Varadkar (Dublin West, Fine Gael)
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Question 703: To ask the Minister for Social Protection the benefits that will be extended to class K contributors to the social insurance fund now that they have to pay 4% of their entire income in contributions to the fund; and if he will make a statement on the matter. [1120/11]

Éamon Ó Cuív (Galway West, Fianna Fail)
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The Social Welfare (Consolidation) Act, 2005, provides that there are two categories of persons who are compulsorily insured - employed contributors and self-employed contributors.

An employed contributor is broadly defined as every person over the age of 16 years and under pensionable age (i.e. 66 years) who is in insurable employment. Insurable employment means employment in the State under any contract of service or apprenticeship, written or oral, whether expressed or implied.

An earner will be an employed contributor where a contract of service exists. A contract of service is an agreement between two named parties that defines the rights and obligations of both parties, is legally binding and benefits each party. A contract may be written, oral, expressed or implied. It may be casual, temporary, part-time or of short duration and still be a contract of service. This is generally understood as a master/servant relationship where the worker is subject to direction, control and dismissal. If no such relationship exists between an employer and an employee, the latter will be insurable as a self-employed contributor.

A self-employed contributor is a person over the age of 16 years and under pensionable age who has reckonable income or reckonable emoluments. A self-employed contributor liable for social insurance contributions is covered for benefits under Class S of the PRSI system.

Office holders are not, by definition, bound by the arrangements of a contract of service as they are not employees. Furthermore, social insurance legislation provides that the income derived from an office-holding is not liable to a Class S social insurance contribution.

However, in accordance with the solidarity principle of the Social Insurance Fund it has now been decided by Government that office holders should contribute to the social insurance system.

The PRSI charge to public office holders will not generate any subsequent benefit entitlement.