asked the Minister for Finance the amount paid in PRSI contributions in 1985 to the Government; if he will allow this to be claimed against a person's income tax liability; and if he will make a statement on the matter.
Written Answers. - Income Tax Relief.
121.
It is assumed that the question refers only to the element of social insurance employee contributions (that is excluding the health contribution, the youth employment levy and the income levy). The total amount paid in these contributions was £284.7 million in 1985.
Social insurance employee contribution rates already reflect indirectly an element of income tax relief. Direct tax relief was allowed up to 1978-79 on the flat rate social insurance contribution referable to certain, long term benefits. When the present, fully pay-related social insurance system was introduced in 1979, it was deemed impracticable to allow direct tax relief on the variable contributions. However, the saving to the Exchequer from cessation of this relief was taken into account in determining the rate of contribution. In addition, persons who contribute at the full 5.5 per cent rate of social insurance contributions are entitled to an income tax allowance of £286. In the circumstances, I do not propose to allow further income tax relief on these contributions.