I am accompanied by Mr. Fred Matthews, Mr. Cathal Cassidy and Mr. Derek Watters. Mr. Denis Dolan who is self-employed had to leave to attend a prior engagement. He did not expect to be here very long. As a self-employed person, one cannot always hang around for as long as one would like.
There has been much discussion on some of the issues we wish to address. I get the impression that many members have been visited at their clinics by self-employed persons whose situation has increasingly become serious in the past few years owing to the downturn in the economy, which is what drove us to establish our organisation. We thank the committee for providing us with the opportunity to state our case against the unjust and unwarranted discrimination against members of Self-Employed Alliance Dundalk and all self-employed persons in the country. Self-employed individuals have contributed enormously to the financing and social structure of the country. Latest Central Statistics Office figures show that in the first quarter of this year there were just under 300,000 self-employed persons in the State. The people in question employ a larger section of the workforce than the multinationals which many consider are the dominant employers in the country.
I run a shop in my home town of Dundalk, selling outdoor activity products. Self-Employed Alliance Dundalk was formed in early 2011 as a result of the fear, anxiety and lack of hope within the local business community. Our members include a wide range of retail and service providers. Many businesses have seen a dramatic reduction in turnover, while many others have closed in recent years, primarily as a result of the economic downturn. Large numbers of shops have closed in Dundalk, some of which were in business for generations. It was obvious from early meetings of the group that there was a wide diversity of factors which were having a detrimental effect on members, including a lack of credit from banks, the withdrawal of long-term overdraft facilities with little notice and no discussion, the burden imposed by the local authority rate increase, bad debts and redundancy payments, etc. However, the number one issue of concern for many self-employed persons was that there was no safety net for them from the Government when things went wrong.
Examples of the disadvantages of being self-employed, as identified by our members, are, first, there is no exposure to unfair dismissal procedures; second, there is no guarantee of a weekly or monthly income; third, there is exposure to financial risk in carrying out work, including bad debts where they arise. In addition, when things go wrong, family homes can be repossessed. The fourth reason is the lack of social welfare benefits available should they become unemployed. Illness, disability and unemployment are not covered by class 3 contributions.
Fifth, most self-employed persons cannot qualify for jobseeker's benefit since it is only given to those who have paid class A PRSI. Sixth, there is no requirement to provide for holiday pay. Seventh, the self-employed are not entitled to extra pay or time off for working overtime - generally, the self-employed put in much greater hours. Eighth, the self-employed are not entitled to sick pay. Ninth, they have no invalidity pension cover; and, tenth, they are not entitled to redundancy payments. Eleventh, in calculating jobseeker's allowance, if the amounts drawn are higher than income, the drawings figure is used.
Twelfth, in calculating income, the deciding officer will ask for the previous set or, possibly, the previous two sets of financial statements, but many self-employed persons' previous accounts will be for 2010. It is possible, therefore, that a person with a year-end date of 31 January may be assessed on accounts for the period 1 February 2009 to 31 January 2010, that is, up to 2.5 years ago and much will have changed in that period. Thirteenth, jobseeker's allowance is available if income is below a certain level. One can remain registered as a sole trader. However, the rules also state one must be available for work which, if self-employed, technically, one is not. Fourteenth, there are problems in obtaining rent and mortgage interest supplement, as it is only available to those working less than 30 hours a week. Self-employed persons have obvious difficulties in establishing the number of hours they work. Fifteenth, owing to rules relating to the number of hours worked, self-employed persons are not able to claim family income supplement. Sixteenth, the PRSI system is a disincentive to self-employment - a key component of economic recovery and job creation. No safety net is provided if things do not go to plan. Therefore, the risk taken in starting a business is greater. This could put off would-be entrepreneurs from taking that risk. Seventeenth, there is a reliance on social welfare deciding officers to decide on claims rather than having exact and complete rules. As self-employed citizens, we do not enjoy equal status when it comes to unemployment assistance, which most PAYE workers take for granted. Self-employed workers cannot make the same contributions as PAYE workers, but they must pay most of the PRSI contributions of their employees.
As self-employed workers, we have made significant sacrifices and are still making them. Most of us work a minimum of 50 hours a week - some work more than 70 hours - yet there is no recognition of the hardship we must endure to keep our business going. We invest our time, money and health to keep us from going under. Most of us do not recognise words such as "overtime", "holidays", "days off", "sick pay", "lunch breaks", etc. The committee may not believe us, but these are luxuries we seldom enjoy. Many of our members could not come here today because of work commitments. Most of us are rushing back to our businesses after the meeting. An employee could simply take a day off.
How much have we contributed in financial terms to the country through income tax, PAYE, PRSI, USC, RCT and VAT? What is our reward if we find ourselves, as many already have, in a situation where we can no longer support ourselves? When we turn to the system to which we have been paying most of our earnings in one form or another, we are told we are not unemployed citizens but unemployed self-employed citizens. At social welfare offices we have been turned away because there are no benefits available and no recognition of self-employed unemployed workers. One is then put through the mill of assessment to be told that one may be entitled to this or that, but, unfortunately, it usually means one is not entitled to anything, which leaves one feeling like a criminal.
This group of unemployed self-employed workers and self-employed workers who may yet find themselves unemployed came together to try to address this appalling inequality. We want equality, like all other citizens of the country. We want to be able to make the same PRSI contributions as all employed workers and also to receive the same benefits without omissions.
In accordance with a commitment given in the programme for Government, in 2011 the Minister for Social Protection established an advisory group on tax and social welfare. Included in its terms of reference were:
To constitute a forum to which the Minister for Social Protection may refer specific issues around the income supports and tax systems so that they provide good incentives to take up work and to contribute to the reduction of poverty and child poverty ...
To examine and report on issues involved in providing social insurance cover for self-employed persons in order to establish whether or not such cover is technically feasible and financially sustainable ...
The terms of reference also stipulated that the advisory group should consider any proposal for changes to existing arrangements in a cost-neutral or cost-reducing context. The Minister recently stated any change to the PRSI system to provide access to short-term benefits such as jobseeker's benefit would have significant financial implications and would have to be considered in the context of a much more significant rise in the rate of contribution payable. She also noted that the question of social insurance cover for the self-employed was being considered in the actuarial review of the social insurance fund which was due to be completed in mid-2012. We await same.
The Oireachtas website outlines three major areas covered by the Joint Committee on Education and Social Protection, two of which link directly with our goals: ensuring our most vulnerable citizens are protected by a strong and equitable social welfare system; and supporting economic recovery. Therefore, we appeal to the committee to take on board our views when discussing the formulation of future legislation in this regard. We want equality and justice.
I will hand over to Mr. Fred Matthews who has been through the process of seeking unemployment benefit.
