Michael Healy-Rae (Kerry, Independent)
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80. To ask the Minister for Finance if he will increase the employer PRSI rate to 13.75 % on incomes in excess of €100,000 to be used in budget 2017 as a part of the proposed funding of €200 million for the expansion of public and subsidised child care; and if he will make a statement on the matter. [29470/16]

Michael Noonan (Limerick City, Fine Gael)
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The Department of Social Protection estimates that the yield in a full year from increasing the Class A employer PRSI rate by 3% from 10.75% to 13.75% on the portion of salary paid in excess of €100,000 per annum would be €198.8 million. This estimate is based on macro-economic indicators for 2017 only, and based on changes to social insurance contributions paid under PRSI Class A only. The estimate does not take possible changes in employer or employee behaviour into account.

I would however point out that PRSI contributions normally accrue in the first instance to the Social Insurance Fund (SIF) for the payment of social welfare benefits and allowances. The SIF is projected to return a current operating surplus in 2016, having returned a current deficit in each year since 2008, peaking at a current deficit of €2,084 million in 2012. However despite the projected surplus in 2016, the financing of the SIF in the medium and long-term remains problematical. The last actuarial review of the SIF, published in 2012, highlighted that financing state pension entitlements, which are largely driven by non-discretionary demographic pressures, will pose a major funding challenge in future years.

In this context I do not feel it would be advisable to introduce an increased employers PRSI charge, which could have detrimental effects on job creation, foreign direct investment and the remuneration practices operated by businesses. In addition, it has not been the practice of successive governments to hypothecate additional revenues for a particular purpose.