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Dáil Éireann debate -
Wednesday, 7 Oct 1992

Vol. 423 No. 1

Written Answers. - PRSI Query.

Ruairí Quinn

Question:

427 Mr. Quinn asked the Minister for Social Welfare if his attention has been drawn to (1) the anomaly whereby a separated woman who receives a maintenance income from her estranged husband, upon which PRSI has already been paid, is obliged to pay PRSI on the income even though she is not working outside the home and (2) representations which have been made to the Revenue Commissioners to which they have responded that the law is such that it would require modification by the Oireachtas in order for such persons to be exempted from PRSI on a maintenance income on the grounds that PRSI had already been paid by the earner of the income; and if he will make a statement on the matter.

I have received representations concerning the different treatment of maintenance payments for tax and PRSI purposes. For income tax purposes the arrangement which generally applies is that the person paying maintenance payments is allowed a deduction for these payments against his income before tax and the payments are treated as income for tax purposes in the hands of the recipient. For PRSI purposes, a deduction of maintenance payments in the hands of the payer is not allowed and the payments in the hands of the recipient are liable. I should point out, however, that PRSI contributions differ from tax in that the payment of social insurance by the recipient allows her to build up entitlement to a Contributory Old Age Pension in her own right.

I am examining the current arrangements to see what changes, if any, are needed. It is a complex area, and any changes would have to take account of the need for social insurance cover, the necessity for a reasonable level of contributions to be paid where benefits are given, and equitable treatment of different types of family units.

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