Patrick O'Donovan (Limerick, Fine Gael)
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83. To ask the Tánaiste and Minister for Social Protection if she plans to make changes on the imposition of PRSI charges on community employment scheme participants receiving more than €352 per week, as it is a deterrent to those with a number of dependants participating in a scheme; and if she will make a statement on the matter. [38882/15]

Joan Burton (Dublin West, Labour)
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I am providing in the Social Welfare Bill currently being debated in this House for the introduction of a new PRSI Credit which will benefit a range of lower paid employees including relevant participants in community employment, gateway and Tús schemes.

Currently, PRSI Class A employees do not make an employee contribution where weekly earnings are under €352.01. Class A employees with weekly earnings of €352.01 or more make a 4% contribution charged on all of their earnings. This creates a “step effect” as net income reduces immediately by the full 4% PRSI charge applied to all earnings.

The new PRSI Credit I am now introducing will reduce the amount of PRSI paid for those with weekly gross earnings between €352.01 and €424. The maximum weekly PRSI Credit of €12 applies at weekly earnings of €352.01 - this will reduce the current weekly PRSI charge from €14.08 to €2.08. Where weekly earnings exceed €352.01 and are less than €424.01 per week, the maximum weekly PRSI Credit applying is reduced on a tapered basis. The new arrangements will ensure that all employees earning between €352 and €424 per week will see their PRSI contribution reduce from January next and the employee will always be better off as earnings increase.

Participants of community employment, gateway and Tús schemes receive a weekly payment which is equivalent to the social welfare payment appropriate to their family size, plus a top up of €20, subject to a minimum payment of €208 per week. This payment is treated in the same manner as earnings from employment for PRSI purposes and accordingly is subject to Class A PRSI. Accordingly, all participants in these schemes earning between €352 and €424 per week will benefit from the new measure. The payment of Class A PRSI entitles these participants to establish entitlement to the full range of long and short term social insurance benefits.

I was also pleased in the recent Budget to announce an increase of €2.50 per week from January in the top up payable to participants of the various employment schemes such as community employment operated by the Department. It should also be noted that all participants on these schemes who have children aged 17 or under will benefit next year from the €5 per month increase in Child Benefit.