Dáil Éireann debate -
Thursday, 22 Oct 1992

Vol. 424 No. 2

Written Answers. - PRSI Allowance.

Ivan Yates

Question:

108 Mr. Yates asked the Minister for Finance the reason former seamen residing in the State who were employed by a company (details supplied) were not granted a PRSI allowance, unlike their British colleagues and were, therefore, treated more severely on the taxation of their statutory redundancy payments; if in view of the inequity of this he will ensure that these PAYE workers are treated the same as ordinary employees with the PRSI allowance; and if he will make a statement on the matter.

Minister for Finance (Mr. B. Ahern)

The seamen referred to by the Deputy worked on ships flying the UK flag. Under EC law, they were required to pay social insurance contributions to the UK authorities. The PRSI allowance was introduced to reduce the burden imposed by Irish social welfare law on employees who paid contributions to the social insurance fund at the high rates. As the seamen referred to in the question did not pay social insurance contributions under Irish law there was no basis for extending the PRSI allowance to them.

I am satisfied that the present treatment is equitable in that the availability of allowances to particular groups of workers is based on the possession by these workers of the relevant qualifying characteristics.

As a result of social insurance contributions being made to the UK Authorities, the seamen are not entitled to statutory redundancy payments from this State. Accordingly the tax exempt status of statutory redundancy payments as provided for in section 37 of the Finance Act, 1968 is not applicable. However, the seamen are entitled to the normal reliefs, allowances and deductions in computing the tax liability on loss of office payments. These include an exemption of between £6,000 and £10,000 or standard capital superannuation benefit (SCSB) on lump sum payments and top slicing relief.