Written answers

Thursday, 19 November 2015

Department of Social Protection

Social Welfare Benefits Eligibility

Photo of Denis NaughtenDenis Naughten (Roscommon-South Leitrim, Independent)
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28. To ask the Tánaiste and Minister for Social Protection her plans to allow self-employed persons to pay extra voluntary contributions in order to be allowed access social protection entitlements; and if she will make a statement on the matter. [40017/15]

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Self-employed persons who earn €5,000 or more in a contribution year are liable for PRSI at the class S rate of 4%, subject to a minimum payment of €500. These contributions entitle them to access social insurance benefits, including State pension (contributory), widow's, widower's or surviving civil partner's pension (contributory), guardians payment (contributory), maternity benefit and adoptive benefit.

In its 2013 report, the Advisory Group on Tax and Social examined issues relating to the provision of social insurance cover for the self-employed on a cost-neutral or cost-reducing context.

The Group was not convinced that there was a need to extend cover for jobseeker's benefit to the self-employed. The Group did, however, find that extending social insurance for the self-employed was warranted, in cases related to long term sickness or injuries, through the invalidity pension and the partial capacity benefit schemes.

In this regard the Group recommended that the rate of contribution for class S should be increased by at least 1.5 percentage points. Based on the 2010 report on the Actuarial Review of the Social Insurance Fund an increase in the region of 17% would be required for the core contributory State pension plus invalidity pension for the self-employed. This takes account of the 15% needed to provide the core full-rate State pension.

The Advisory Group considered the issue of allowing self-employed persons pay extra contributions to access benefits on an optional basis. The Group recommended against it as allowing people to opt in or out could lead to the selection of bad risks. It therefore recommended that any extension of social insurance to the self-employed should be on a compulsory basis.

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