Michael McGrath (Cork South Central, Fianna Fail)
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202. To ask the Tánaiste and Minister for Social Protection the number of persons who will benefit from the tapering of pay-related social insurance introduced in the budget; the average benefit they will receive; and if she will make a statement on the matter. [36608/15]

Joan Burton (Dublin West, Labour)
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I am introducing the tapered PRSI Credit as part of Budget 2016, to address a significant issue with the manner in which charging PRSI impacts those on lower weekly earnings.

Currently Class A employees become liable to pay PRSI on all earnings, once weekly earnings exceed €352.01 This creates a “step effect” as net income reduces immediately by the full 4% PRSI charge applied to all earnings. This means that a €0.01 increase in weekly earnings of €352 attracts a weekly PRSI charge of €14.08.

The introduction of the PRSI Credit will address the “step effect” by reducing the actual amount of PRSI charged, for those earning between €352.01 and €424 in a week. At weekly earnings of €352.01 the maximum PRSI Credit of €12 will reduce the PRSI charge payable from €14.08 to €2.08.

As gross earnings increase, the PRSI Credit is withdrawn on a tapered basis. This ensures that the amount of PRSI actually charged will increase in a progressive manner as gross earnings increase. At gross weekly earnings of €424, the tapering of the Credit has exhausted and the PRSI charge at 4% applies.

It is estimated that the introduction of the PRSI Credit will benefit 88,369 employments. The benefit for individual employees depends on the level of their weekly earnings. The following table details the numbers of employments and the extent of their weekly gains, at different income bands.