asked the Minister for Social Welfare the number of workers who are paying the reduced rate of PRSI by virtue of being holders of medical cards; if he has satisfied himself that this reduced rate is being availed of by all those who are entitled to it; if he intends to take any action to increase public awareness of the availability of the reduced rate; and if he will make a statement on the matter.
Ceisteanna—Question. Oral Answers. - Medical Card Holders' PRSI Liability.
8.
Medical services cards are issued by the health boards to many categories of persons. Many holders of these cards are over pensionable age or unemployed and are not, therefore, in insurable employment.
The PRSI contribution payable by employees includes a 1.25 per cent health contribution and a 1 per cent employment and training levy. Under the Health Contributions Act, 1979, and the Youth Employment Agency Act, 1981, holders of medical services cards are exempted from paying these two elements of the PRSI contribution. Where the employee is exempted the contributions are payable by an employer. In 1986-87, the last complete tax year for which the returns have been fully analysed, 27,500 employees benefited from the exemption.
Under the PRSI system, an employer is required to apply the appropriate contribution class applicable to each employee. For each income tax year, my Department issue various PRSI documentation, including PRSI rates leaflets, to all registered employers. In addition, details of the main contribution classes are published in the newspapers. All this information includes reference to the fact that employees holding current medical services cards pay a reduced rate of PRSI contribution.
The operation of all aspects of the PRSI system is monitored. In this context, the situation of employees who hold medical services cards was stressed in a covering letter which issued with revised PRSI documentation to all registered employers earlier this month.
On an on-going basis, my department's information section are engaged in pursuing a very active policy to increase public awareness of all aspects of schemes and services. Officers of the Department regularly participate in seminars and give talks and lectures covering the various aspects of the PRSI contribution system. Recently an information leaflet, entitled "Employee's Guide to PRSI", has been produced and will shortly be issuing to persons registering for PAYE-PRSI purposes. This new leaflet makes specific reference to the PRSI situation of employees who hold medical services cards.
I am satisfied that every effort is made by my Department to acquaint both employers and employees of the PRSI liability position of medical card holders. I believe that the new guide aimed specifically at employees will do much to ensure that employees continue to benefit from the exemptions in appropriate circumstances.
What proportion of those entitled to the reduced rate are availing of it? The Minister indicated that 27,500 people benefited from the exemption and I should like to know what proportion that is of the number of people who are entitled to the benefit. Will the Minister consider introducing a more direct way of informing employees of their entitlements, perhaps through a note circulated with tax free allowance certificates, or by way of getting the Department of Health to notify medical card holders in the standard letter they receive?
I have done two things in regard to this in recent times. I have had an information leaflet published for employees. That leaflet is important for other reasons as well as notifying them of the benefits that are available. The Department of Health have been asked to consider highlighting the position. They deal directly with medical card holders and they are in a position to notify them. The simple answer to the Deputy's question in regard to numbers is that we do not know. About 700,000 medical cards are in circulation and many of them are for the elderly, the sick and the unemployed. For example some 90 per cent of those over 65 years of age are in possession of medical cards. Through the new information leaflet, and the work of the Department of Health, we should get the message across.
Will the Minister agree that those with medical cards are adjudged through a means test to be at least on the border as far as income is concerned? Will the Minister accept that the reduction such people would be entitled to would be significant? I came across an employee in the public service who was losing £3 per week as a result of not knowing his entitlements.
The reduction is from 7.75 per cent to 5.50 per cent and I accept that that can be significant. We could also consider informing people through the FIS scheme.