Patrick O'Donovan (Limerick, Fine Gael)
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43. To ask the Tánaiste and Minister for Social Protection the cost of extending jobseeker's benefit to the self-employed; and if she will make a statement on the matter. [35055/15]

Joan Burton (Dublin West, Labour)
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The cost of extending certain short-term social insurance benefits, including jobseeker's benefit, was considered in the Actuarial Review of the Social Insurance Fund, as at 31 December 2010. The Review covers a 55 year period and builds on the findings of previous Actuarial Reviews, taking account of the policy, economic and demographic changes with particular reference to income and expenditure projections as well as value for money and break-even contribution rates issues.

The Review found that the self-employed achieve better value for money compared to the employed when the comparison includes both employer and employee contributions in respect of the employed person. The report also found that the effective annual rate of contribution, or the required contribution as a percentage of salary, needed to provide the core full-rate State pension (contributory), which is the benefit currently available to self-employed contributors, is approximately 15%. This is compared favourably with the 4% rate currently paid by the self-employed. In relation to the provision of jobseeker's benefit to the self-employed, the report found that an incremental increase in contribution rates from approximately 15% to 16% would be required if jobseeker's benefit in addition to core State pension (contributory) is provided.

The report estimated the full year incremental costs of extending jobseeker's benefit to the self-employed to be €87m, in 2012 terms, where the incidence rate of benefit is the same as that applying to the overall population. This was estimated using a number of assumptions based on the existing population of contributors and beneficiaries.

The extension of jobseeker's benefit to the self-employed was subsequently examined in the Third Report of the Advisory Group on Tax and Social Welfare, published in September 2013. The Group was asked to examine and report on issues involved in extending social insurance coverage for self-employed people in order to establish whether or not such cover is technically feasible and financially sustainable, with the requirement that any proposals for change must be cost neutral.

The Group found that the current system of means tested jobseeker’s allowance payments adequately provides cover to self-employed people for the risks associated with unemployment. In this context, the Group noted that almost 9 out of every 10 self-employed people who claimed the means tested jobseeker’s allowance during the three-year period from 2009 to 2011 received payment. Consequently, the Group was not convinced that there was a need for the extension of social insurance for the self-employed to provide cover for jobseeker’s benefit.