Dáil Éireann debate -
Tuesday, 17 Nov 1987

Vol. 375 No. 4

Ceisteanna—Questions. Oral Answers. - Social Insurance Contributions.

62.

Mr. J. Mitchell

asked the Minister for Social Welfare if he will give details of the way in which he proposes to introduce social insurance contributions from farmers and other self-employed; the level of contribution proposed; the method and timing of collection; the total amount he envisages he will collect in each of the first three years of the scheme; if an actuarial assessment has been made of the future liabilities which will be incurred arising from these contributions; and if he will make a statement on the matter.

16.

Miss Flaherty

asked the Minister for Social Welfare if he will give details of his stated intention to subject farmers and the self-employed to PRSI; and if he will indicate the contribution levels and the method of collection of these contributions.

17.

Mr. Keating

asked the Minister for Social Welfare if he will outline the Government's intentions with regard to the proposed extension of the PRSI tax system to the self-employed; and if he will make a statement on the matter.

44.

Mr. Sherlock

asked the Minister for Social Welfare the rate at which farmers and the self-employed will be asked to pay PRSI; when it is intended that payment will commence; the basis on which liability for PRSI is to be assessed; if additional staff will be employed in his Department to assess the liability of these groups for PRSI and to ensure speedy payment; and if he will make a statement on the matter.

57.

Mr. G. Mitchell

asked the Minister for Social Welfare if he will make a statement on the inclusion of farmers and self-employed in the PRSI scheme.

Dr. Woods:

I propose to take Questions Nos. 62, 16, 17, 44 and 57 together.

The extension of social insurance coverage to the self-employed including farmers will be a major development in the social welfare system in this country. For the first time self-employed people will have an entitlement to a non-means tested pension and will no longer have to rely entirely on social assistance pensions. Furthermore, the extension will end the present unsatisfactory situation where a large block of the working population make no direct contribution towards the costs of pensions even though many are in a position to do so. In future self-employed people will be liable for contributions in the same way as other contributions and the overall costs of social insurance will be shared in a more equitable way across the working population. Finally, the extension will bring this country more into line with other EC countries in regard to social insurance coverage.

I have asked the National Pensions Board to examine all aspects of this issue as a matter of urgency and I expect to receive the board's report within the next few weeks. This report will include recommendations as to the level and range of pensions to be provided, the conditions for entitlement, the method of financing and the rates of contribution based on actuarial projections of emerging costs over a number of years.

When I have received the board's report I will be putting detailed proposals to Government for the introduction of the new system. Pending consideration of the matter by the Government it is not possible to provide any further details in relation to the new system at this stage.

Mr. J. Mitchell:

Will the Minister confirm that it is his intention to introduce this in April 1988?

Dr. Woods:

Yes.

Mr. J. Mitchell:

Has the Minister any idea of the liabilities he is going to incur arising from this proposal?

Dr. Woods:

Yes, I have.

Mr. J. Mitchell:

Could he give them to the House?

Dr. Woods:

If the Deputy puts down a suitable question I can get him more of that detail. In any event——

Mr. J. Mitchell:

It is in the question.

Dr. Woods:

——it is feasible. The liabilities depend on the actuarial studies and the future use of the schemes and the likely participation. We have had our estimates of that, but this is being considered also in the context of the board's report.

Mr. J. Mitchell:

The Minister has told us that he has figures for the liabilities. I have asked in the question if he can give us details of those liabilities in the future.

Dr. Woods:

If the Deputy puts down a question——

Mr. J. Mitchell:

I have put down a question.

Dr. Woods:

——I will get as much as is available for him at this stage. It is a different question. None of these questions covers that aspect, but I can give the numbers of people involved. I can give him the amount. We pay approximately £329 million at present for non-contributory pensions to people in these categories.

Mr. J. Mitchell:

I know that. This is a most important subject which could end up a horrendous mess. Does the Minister acknowledge that there are great difficulties already in collecting health contributions from farmers? Does he acknowledge that there has been continuous difficulty in getting taxation from farmers? In the light of that experience, can he tell us how he proposes to collect PRSI contributions from farmers? At what level? Is it to be a fixed rate? Is it to be a percentage of their income? If it is to be a percentage of their income like other contributors as the Minister said, how are we to know their income?

Dr. Woods:

We have a good deal of information——

Mr. J. Mitchell:

Let him give it to me.

Dr. Woods:

——on the people concerned — at least the Revenue Commissioners have that information in relation to their payments for tax and their liability for tax. We will be giving particular attention to the collection system. I appreciate the Deputy's point in that respect. I believe this can be done. I appreciate that for a number of years the question has always been left aside for one reason or another. I have decided, and I have convinced the Government, that we should go ahead with this at this time, and we are doing that. We will overcome the difficulties which are there to be overcome and I am quite confident we will collect a substantial amount of money from this area.

Mr. J. Mitchell:

Will the Minister not agree it is as plain as a pikestaff he has no clue as to what the cost of this will be or what liabilities will be incurred? He has just told us that after his announcement of 29 July he asked the National Pensions Board, mind you, to do an urgent actuarial assessment; yet, he tells us that this is to be introduced next April. Would he not be better to admit to the House that he is making a mistake and that he should postpone this until the implications are understood fully?

Dr. Woods:

Is the Deputy not anxious to proceed with this measure? His Government while in office did not proceed with it. This Government have made a major decision in proceeding with this measure——

Mr. J. Mitchell:

It is clear the Minister had no idea what was involved.

Dr. Woods:

Nobody ever suggested it was an easy task. I did not suggest it. The Deputy's Government failed to deliver on it during their period in office, for whatever reason I do not know. Deputy Desmond was very keen that it would go ahead but he did not succeed even in getting a decision in principle, never mind the details. This measure is going ahead. It will be a successful measure. I will announce the details when I have put my final proposals to the Government on the detailed application of the scheme shortly, towards the end of this month. The time is almost complete now for the studies.

An Ceann Comhairle:

Question No. 63.

Mr. J. Mitchell:

A Cheann Comhairle——

An Ceann Comhairle:

I am going on to deal with the Deputy's other questions. I want to deal with Deputy Mitchell's questions within the prescribed time. There are two more questions in his name and I propose to dispose of them with his co-operation.

Mr. J. Mitchell:

May I ask to raise this matter on the Adjournment?

An Ceann Comhairle:

Certainly. I will communicate with the Deputy.