Michael Healy-Rae (Kerry, Independent)
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134. To ask the Minister for Social Protection the status of small farmers making tax returns; and if he will make a statement on the matter. [20336/16]

Michael Healy-Rae (Kerry, Independent)
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137. To ask the Minister for Social Protection the status of small farmers making tax returns; and if he will make a statement on the matter. [20335/16]

Leo Varadkar (Dublin West, Fine Gael)
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I propose to take Questions Nos. 134 and 137 together.

Self-employed workers, including farmers, whose annual income exceeds €5,000 are liable to pay PRSI at the class S rate of 4%, subject to a minimum annual payment of €500. Similar to other self-employed workers, farmers pay PRSI, along with income tax and USC, with their annual return using Revenue's self-assessment system. The payment of the annual class S PRSI payment by self-employed workers means that 52 paid contributions are awarded to their social insurance record in respect of that contribution year.

Where farmers and other self-employed workers earn less than €5,000 in a particular contribution year, they are not liable to pay PRSI. To protect their social insurance record they may opt to pay voluntary contributions, subject to satisfying the qualifying conditions. To become a voluntary contributor, a person must have paid at least 520 weeks PRSI in either employment or self-employment and apply within 12 months of the contribution year in which they were last paid PRSI. The voluntary contribution payment for the self-employed is a single flat rate annual payment of €500, which results in 52 paid contributions being awarded to their social insurance record in respect of that contribution year. The majority of people paying voluntary contributions are former self-employed workers. Full details of the voluntary contribution scheme are provided on the Department's website www.welfare.ieand are also available from the Citizens Information Board (CIB).

The system of PRSI for employees differs, in that it applies on a weekly and not annual basis. In general, employees are liable to pay PRSI at 4% on weekly earnings in excess of €352, which is deducted at source and remitted through the PAYE system. In addition, their employers pay PRSI at 8.5% for weekly earnings between €38 and €376 and at the rate of 10.75% where weekly earnings exceed €376. Paid contributions are only awarded to employees’ social insurance record for each week they have been in insurable employment.

Employees also have the opportunity of applying to pay voluntary contributions in respect of weeks for which they are not working and for which no paid contribution is awarded to their social insurance record, subject to satisfying the qualifying conditions. Voluntary contributions for employees are based on their income in the previous year and the rate of payment depends on the nature of their employment. For most former employees, voluntary contributions are payable at rate of 6.6%, subject to a minimum annual payment of €500.