Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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1031. To ask the Minister for Employment Affairs and Social Protection the rationale for the lower rate of PRSI in Class D that applied to civil servants who commenced employment prior to April 1995; the reason it was discontinued in April 1995 in favour of Class A, which applies to the majority of workers; and if he will make a statement on the matter. [11654/25]

Dara Calleary (Mayo, Fianna Fail)
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Prior to 6 April 1995, civil and public servants did not have access to the full range of social insurance benefits as their terms of employment protected them against the main contingencies of illness and old age, and the risk of unemployment was not considered a factor due to the nature of their employment. In 1994, the Government decided that civil and public servants appointed on or after 6 April 1995 should be subject to the full (class A) rate of PRSI contribution. This was done in the context of the class A PRSI contribution covering the very large majority of workers for a greatly expanded range of contingencies which had developed over many years. The extension of class A PRSI coverage to civil and public servants recruited after 6 April 1995 provided comprehensive social insurance cover for these employees, while spreading the cost of such cover by extending the contribution base.

Civil and public sector employees recruited prior to 6 April 1995 pay social insurance contributions at modified rates under classes B, C and D. Amongst the class B contributors are permanent and pensionable civil servants and Gardaí; the class C contributors are commissioned army officers and members of the army nursing service; and the class D contributors include permanent and pensionable employees in the public service, other than those insured at classes B and C.

Consequently, such contributors pay less in social insurance contributions in return for fewer social insurance benefits. For example, class D contributors currently pay a contribution at the rate of 1% on their weekly earnings up to €1,443 and 4.1% on weekly earnings over that amount; their employers pay a contribution of 2.45% on all employee earnings. Class D contributors are currently entitled to widow's, widower's or surviving civil partner's (contributory) pension, guardian's payment (contributory), occupational injuries benefits, parent's benefit and carer's benefit.

In contrast, civil and public servants recruited from 6 April 1995 pay a higher social insurance contribution of 4.1% under PRSI class A on their weekly earnings; their employers pay a contribution of 8.9% where employees’ weekly earnings are €527 or less, and 11.15% where their employees’ weekly earnings exceed €527. Class A contributors have access to the full range of social insurance benefits.

I trust this clarifies the matter for the Deputy.