James Bannon (Longford-Westmeath, Fine Gael)
Link to this: Individually | In context

Question 318: To ask the Minister for Social Protection if all workers, including employees and the self-employed, will be on the same PRSI scheme, in view of the fact that any differential is a flaw in the current economic situation; and if she will make a statement on the matter. [15274/11]

Joan Burton (Dublin West, Labour)
Link to this: Individually | In context

The range of benefits and pensions to which different groups of workers may establish entitlement reflects the risks associated with the nature of their work. This in turn reflects the rate of contribution payable. Self-employed people are liable for PRSI at the Class S rate of 4% 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 14.75%, under the full-rate PRSI Class A.

Self-employed workers are not insured for 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 persons pay, the practicalities of administering and controlling access to short-term payments and the annualised system of contributions applicable to self-employed contributors. 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. 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 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. It is accepted that future earnings may be lower than those of previous years and 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.