Peadar Tóibín (Meath West, Sinn Fein)
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Question 114: To ask the Minister for Social Protection if she is seeking any changes to the PRSI system in order to provide a social welfare safety net underneath self-employed persons. [28889/11]

Joan Burton (Dublin West, Labour)
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Self-employed persons 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). Ordinary employees who have access to the full range of social insurance benefits pay Class A PRSI at the rate of 4%. In addition, their employers 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. For employees earning less than €356 per week, the rate of employer's PRSI is 4.25%.

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.

Any changes to the PRSI system in order to provide a social welfare safety net underneath self-employed persons 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. The Advisory Group on Tax and Social Welfare was established by me earlier 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.

Self-employed persons may establish eligibility to assistance-based payments including 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.