Paudie Coffey (Waterford, Fine Gael)
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Question 89: To ask the Minister for Social Protection her plans to amend the current welfare system for self-employed persons in order that they would be entitled to benefits if they were to become unemployed; and if she will make a statement on the matter. [27975/11]

Joan Burton (Dublin West, Labour)
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Ordinary employees who have access to the full range of social welfare benefits, including jobseeker's benefit, pay Class A PRSI at the rate of 4%. In addition, their employers make a PRSI contribution of 10.75% in respect of the employee, resulting in the combined payment of 14.75% per employee under full-rate PRSI Class A. (For employees earning less that €356, the rate of employer's PRSI is 4.25%).

Self-employed workers are liable for PRSI at the Class S rate of 4% which entitles them to access long-term benefits such as State pension (contributory) and widow's, widower's or surviving civil partner's pension (contributory). Any proposal to extend short term benefits such as jobseeker's benefit to the self-employed 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.

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 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.

Self-employed workers may establish eligibility to assistance-based payments such as jobseeker's allowance. They can apply for the means-tested jobseeker's allowance if their business ceases and they become unemployed 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.

The Advisory Group on Tax and Social Welfare was established in August of this year in fulfilment of the commitment made in the Programme for Government. The Advisory Group will, inter alia, examine and report on issues involved in providing social insurance cover for self-employed persons in order to establish whether or not such cover is technically feasible and financially sustainable. It is intended that the Advisory Group should consider any proposals for change to existing arrangements in a cost-neutral or cost-reducing context.