Willie O'Dea (Limerick City, Fianna Fail)
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66. To ask the Minister for Employment Affairs and Social Protection her plans to reform the social insurance system to a system based on the contributory principle as outlined in a document (details supplied); and if she will make a statement on the matter. [8309/18]

Regina Doherty (Meath East, Fine Gael)
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Ireland has a unified system of social security whereby all contributions paid by workers (and their employers, where applicable) are paid into a single fund, the Social Insurance Fund (SIF),which is applied to pay benefits to which those workers have established entitlement. The Irish social welfares system recognises different categories or “Classes” of workers. The rate of contribution paid by these categories differs. They can therefore access different levels of social insurance benefits. For example, Class A employees, generally private sector employees and post 6 April 1995 public servants, pay a combined employer and employee PRSI rate of up to 14.85% and qualify for all social insurance benefits. In contrast, Class B public sector employees pay a much lower combined PRSI rate of up to 2.91%. Consequently, they qualify for a restricted range of social insurance benefits. They do not qualify for the State pension (contributory), relying instead on their occupational pensions. This government is committed to improving the PRSI scheme for employees and the self-employed. Entitlement to treatment benefit was extended to the self-employed in March 2017 and the treatment benefit scheme was improved for all qualified contributors in October 2017 with the optical scheme now covering the provision of glasses, either free or subsidised if an upgraded design is chosen, or provide a contribution towards contact lenses.

Repairs to glasses are also covered under the scheme. The dental scheme now includes a contribution to cleanings, either an annual scale and polish or more extensive periodontal treatment if clinically required. Even more significantly, self-employed contributors are now eligible for the invalidity pension from December 2017. For the first time, this gives the self-employed access to the safety-net of State income supports if they become permanently incapable of work as a result of an illness or disability without having to go through a means test. This is a real advance in the level of cover available to the self-employed.

On 23 January, the Government agreed to a proposal that will allow pensioners affected by the 2012 changes in rate bands to have their pension entitlement calculated by a new “Total Contributions Approach” (TCA) which will include up to 20 years of a new Home Caring credit. Unlike the current Homemakers scheme, this credit will apply to periods both before and after 1994. This approach is expected to significantly benefit many people, particularly women, whose work history includes an extended period of time outside the paid workplace, while raising families or in a caring role. It will make it easier for such pensioners to qualify for a higher rate of the State Pension (contributory). The TCA will ensure that the totality of a person’s social insurance contributions - as opposed to the timing of them - determines a final pension outcome, and it also acknowledges, for the first time, the contribution made by home-carers in the period before 1994.

An inter-departmental working group has been established to examine and report on options for the amalgamation of USC and PRSI. It will have regard to the structures and rates of personal tax and social insurance in other countries and the macroeconomic and demographic contexts in Ireland and its work should be completed by the end of June 2018.