Brendan Griffin (Kerry South, Fine Gael)
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154. To ask the Tánaiste and Minister for Social Protection the status of the provision of an adequate social protection safety net for self-employed persons whose businesses fail or for whom work is not continuous; if the lack of adequate protection for the self-employed has historically been one of the greatest injustices in the Irish social protection system. [42620/15]

Joan 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. This contrasts with a combined employer and employee PRSI rate of 14.75% paid in respect of most employees, who can then access the full range of social insurance benefits.

Self-employed workers who become unemployed or ill can establish entitlement to assistance-based payments such as jobseeker’s allowance or disability allowance. In the case of jobseeker’s allowance they can apply for the means-tested jobseeker’s allowance if their business ceases or if they are on low income as a result of a downturn in demand for their services. As in the case of a non-self-employed claimant for jobseeker’s allowance or disability allowance, the means of husband/wife, civil partner or co-habitant will be taken into account in deciding on entitlement to a payment.

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 as 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. 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, which compares favourably with the 4% rate currently paid by the self-employed.

While I am anxious to expand the level of social insurance entitlements for the self-employed, any such change would have to be funded by an appropriate level of contribution.