Michael McNamara (Clare, Labour)
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343. To ask the Minister for Social Protection if his attention has been drawn to an anomaly in the implementation of USC/PRSI whereby when an employee moves, for example, from €352 gross weekly pay to €365.64, less than a 4% increase, the net result is that the employee receives €1.54 less and the additional cost to the employer is €37.9; if he will remedy same; and if she will make a statement on the matter. [25542/13]

Joan Burton (Dublin West, Labour)
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Employees earning €38 or more in a week are subject to PRSI, which provides the employee with access to a wide range of long and short term social insurance benefits. For earnings between €38 and €352 a week inclusive, the rate of employer PRSI is 4.25%. No employee PRSI is payable. Where the employee’s weekly earnings exceed €352 per week, employee PRSI at 4% is payable on all income. The rate of employer PRSI increases from 4.25% to 10.75%, once weekly earnings exceed €356. There is no anomaly in the operation of the PRSI system. When employees moves to a higher earnings band they and their employer pay PRSI at the rate appropriate to the new band.

You will appreciate that in order to fund the social insurance entitlements of employees, contributions from both employees and employers are necessary. Lower rates of PRSI are charged on those with lower levels of earnings. Employees earning less than €352 per week do not pay employee PRSI. Employee PRSI at 4% is only payable where weekly earnings exceed €352. In relation to employer PRSI, the lower rate applying to earnings between €38 and €356 was reduced from 8.5% to 4.25% in July 2011, as part of the Jobs Initiative to meet one of the Programme for Government commitments. The higher rate of employer PRSI applies to earnings exceeding €356.

The charging of USC is a matter for the Minister for Finance.