asked the Minister for Social Welfare if his attention has been drawn to the fact that due to a recent change in social welfare legislation, ministers of religion employed in temporary, whole time and part time capacity will have PRSI deducted from their incomes at a rate of 7.75 per cent as opposed to 2.25 per cent previously; his views on whether this represents a remarkable jump in PRSI for a priest who had been working in a parish; and if he will reconsider this situation or, introduce a scheme where by the change would be gradually phased in or marginal relief allowed.
Written Answers. - PRSI Deduction Change.
80.
Prior to 6 April 1988 ministers of religion and members of religious orders, apart from ministers of the Church of Ireland, were not included in the social insurance system and were not liable to pay any PRSI contribution. However, they may have been liable to pay a contribution of 2.25 per cent, comprising the 1.25 per cent health contribution and the 1 per cent employment and training levy, which is presumably the contribution referred to by the Deputy in the question.
The Social Welfare Act, 1988, provided for the extension of social insurance to the self-employed from 6 April 1988. Persons who are in receipt of reckonable emoluments or income, as defined in the Act, are now liable to pay pay-related social insurance contributions. Certain ministers of religion who are engaged in pastoral duties are in receipt of reckonable income and are, accordingly, liable to pay social insurance contributions as self-employed contributors this year at the rate of 3 per cent. This contribution is in addition to the 1.25 per cent health contribution and the 1 per cent employment and training levy. Such contributions provide cover for contributory pensions.
Social Insurance is being introduced on a phased basis for self-employed contributors and will be raised to 4 per cent in the 1989-90 tax year and to 5 per cent in the 1990-91 tax year.
Following the extension of social insurance to the self-employed from 6 April 1988 other ministers of religion and members of religious orders employed under a contract of service in a whole-time, part-time or temporary capacity were brought into social insurance for the first time. The extent of social insurance cover for such religious employees is determined by the nature of their employment. The majority of religious brought into the social insurance system as employed contributors from 6 April 1988 are working in a permanent and pensionable capacity in teaching and the health service and are, accordingly, now liable to pay PRSI at the Class D rate of contributions that is 3.15 per cent. This represents an additional contribution of 0.9 per cent on the levies amounting to 2.25 per cent which they had previously paid. Class D PRSI contributions provide cover for limited social insurance benefits.
Religious employed in a temporary capacity in teaching or the health service are liable to pay Class A PRSI contributions, that is 7.75 per cent. This represents an additional contribution of 5.5 per cent for social insurance onto the 2.25 per cent previously paid in respect of levies. However, they are now entitled to additional tax relief through the PRSI tax allowance which is currently £286 per annum. These Class A PRSI contributions provide cover for all social insurance benefits, including disability and unemployment benefits, invalidity, old age (contributory) and retirement pensions.