asked the Minister for Social Welfare if she will consider allowing employees of semi-State companies to pay class A contributions even though they are now insurable under the Social Welfare Acts at PRSI class D of social insurance, in order to protect themselves against dismissal, long-term illness or suspension.
Ceisteanna—Questions. Oral Answers. - PRSI Contributions.
9.
One of the terms of reference of the Commission on Social Welfare is to review and report on the system of pay-related social insurance contributions. The question of extending full social insurance coverage to public sector employees will be considered in the context of the recommendations of the commission. The matter will also be considered in the context of the framework for a national pension plan which is being drawn up.
What is the up-to-date position in relation to the national pension plan mentioned by the Minister? Have any costings been done in relation to the proposal contained in my question? For example, have any costings been done on what would be the financial commitment by the State if my proposal was implemented?
The future of the PRSI status of public servants is being considered in drawing up the framework for a national pension plan referred to in the Government's document Building on Reality 1985-1987. One option which has been considered is that all persons entering public service employment for the first time would be fully covered by PRSI. The Department of Finance have always contended that proposals along these lines would ultimately leave the Exchequer in the position of a net loser because of higher employer contributions and the possibility of consequential pay compensation for public servants. On the cost factor, the inclusion of public servants in full social insurance would raise major administrative, financial and industrial relations problems. Existing occupational pension and sick pay entitlements would have to be reduced to take account of the new social insurance entitlements — the much higher employer's contribution which is 12.33 per cent, class A, compared with 2.28 per cent, class D, which would largely fall to be met by the State either directly, as employer, or through participation in the financing of the organisation concerned. Of course employees would also be required to pay higher contributions — 7.5 per cent class A, compared with 2.9 per cent class D, from which no additional benefit would be derived. I have not got the overall cost figure which would have to be worked out at the time.
My question asks that the Government would give public service employees a choice. I am asking the Minister to respond to the fact that at present many public service employees are forced into participating in private income continuance plans and other insurance policies to protect themselves. Would the Minister take that into consideration when final proposals are being brought forward by his Department?
The whole question will be considered in the context of the recommendations of the Commission on Social Welfare, when I am sure that all considerations will be taken into account.
As it is now 3.30 p.m. we must move to questions nominated for priority. Question No. 21 has already been dealt with.