asked the Minister for Finance the estimated net income and net expenditure of each of the 14 proposals in regard to the restructuring of the PRSI system (details supplied); and the net cost, if any, or income, if any, to the Exchequer of these proposals.
Written Answers. - PRSI System.
438.
For the purposes of costing the proposals referred to by the Deputy, it is assumed that the existing PRSI rate payable by employers on earnings up to £9,500 will continue unchanged. The package of measures proposed would give rise to (a) changes in contribution income payable by or on behalf of individuals and (b) additional benefits to which individuals would become entitled. Following are estimates of the full year costings expressed in 1982 terms. It will be appreciated, however, that because of limitations on available data which form the basis of various costings involved, the estimates furnished are necessarily tentative.
|
(a) Contribution income: |
£ million |
|
|
(i) |
employers contributions at existing levels |
499 |
|
(ii) |
4.5 per cent of income of all workers |
289 |
|
(iii) |
1.5 per cent of income of private sector employees |
71 |
|
(iv) |
5.5 per cent of income of self-employed |
41 |
|
(v) |
4.5 per cent of income of all other individuals, except those mentioned under proposals Nos. 6 and 7 |
20 |
|
920 |
||
|
Add: estimated yield from capital gains |
1 |
|
|
921 |
||
|
Less: contribution income as presently structured (i.e. pay-related social insurance contributions, health contributions and youth employment levy) |
884 |
|
|
Net change in contribution income |
+37 |
|
|
(b) Additional benefits |
||
|
(i) |
health benefits |
not available — see note 2 below |
|
(ii) |
expansion of social welfare treatment benefits and survivor pensions. |
45 |
|
(iii) |
income tax relief on all contributions (up to 35 per cent marginal income tax rate). |
150 |
|
(iv) |
Refund of contributions under proposal No. 14 |
2 |
|
Total additional benefit costs |
197 |
|
|
(c) Extra Exchequer Costs |
||
|
(b) — (a), but see note 2 below. |
||
|
160 |
Notes
(1) Private sector employees at (a) (iii) are assumed to include employees in the public sector who currently pay full rather than modified PRSI contributions.
(2) It is not possible to say what additional cost would arise for the health services. These services cost £1,000 million of Exchequer moneys in 1982 on the basis of a particular balance of services provided publicly and privately. The financial consequences of upsetting this balance cannot be estimated with any accuracy but the Exchequer costs would be very substantial.
(3) Cost at (b) (ii) includes the potential full year cost of additional benefits accruing net of savings on non-contributory pensions otherwise payable in the case of the self-employed.
(4) Costs at (b) above assumes that existing social insurance benefits not mentioned in the private members motion, such as, invalidity pension, disability benefit, maternity benefit and pay-related benefits would continue, as at present, to be payable to employees only.