Dáil Éireann debate -
Tuesday, 30 Jan 1990

Vol. 394 No. 8

Written Answers. - Legal Separation Anomaly.

Ruairí Quinn

Question:

242 Mr. Quinn asked the Minister for Social Welfare if his attention has been drawn to the anomaly which exists in relation to persons who have a legal separation and where an agreement by the husband to support his wife is based on a portion of his income being paid directly to her, the wife is then required to pay PRSI on the income which she receives from her husband, notwithstanding the fact that the income had PRSI already deducted from it; his views on whether the above situation represents double taxation; the steps he proposes to take to remove the injustice of this anomaly; and if he will make a statement on the matter.

Minister for Social Welfare (Dr. Woods)

Under the provisions of the Social Welfare Act, 1988 persons who have reckonable income or reckonable emoluments, as determined in accordance with the provisions of the Income Tax Acts, are liable to pay PRSI contributions as self-employed contributors, provided their income is in excess of £2,500 a year. These contributions establish a personal entitlement to contributory old age and widow's and orphan's pensions.

In extending social insurance to the self-employed the Government decided that both earned and unearned income would be assessable for PRSI and, accordingly, the definition of reckonable income includes moneys received by way of maintenance payments. To exempt such payments from liability for PRSI contributions would cause many persons in need to be excluded from social insurance cover and from possible entitlement to social insurance pensions.