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Dáil Éireann debate -
Tuesday, 28 Jun 1994

Vol. 444 No. 5

Written Answers. - Report on Employers' PRSI Contributions.

John Bruton


35 Mr. J. Bruton asked the Minister for Social Welfare if he will publish the detailed study of the impact of employers PRSI on low-paid labour intensive sectors of manufacturing conducted by an interdepartmental group; and if he will consider commissioning a similar study in regard to the service sector.

I assume that the Deputy is referring to the report of an interdepartmental working group on employer's PRSI contributions which reported to me before this year's budget. The group was made up of civil servants from the Departments of Social Welfare, Finance, Enterprise and Employment and the Revenue Commissioners.

The original impetus behind the establishment of the interdepartmental working group arose out of a general concern that the employer's PRSI contribution system should facilitate job creation and maintenance in the labour intensive sectors of manufacturing industry. The group also considered low-paid employment generally and included the services sector.

The group was established so as to provide the Government with a consistent and well-balanced consideration of the issues involved. In line with normal practice for such groups, the report was not published at the time.

I announced a number of measures in the 1994 budget designed to improve the employment-support aspects of the PRSI system in respect of all lower-paid employment. Those measures include the introduction of a new lower rate of employer's PRSI contribution for lower-paid employees, continuation of the PRSI exemption scheme and an ending of the employer's liability to pay levies on behalf of employees who are medical card holders. The combined impact of the new lower rate employers PRSI and levies exemptions amounts to a major cash boost — to the tune of about £89 million in a full year in support of jobs in labour intensive sectors of the economy. These initiatives have targeted significant relief at those sectors which contain large numbers of lower-paid workers, whether they are employed in industry or services.

In introducing these measures, I have undertaken to keep the possibility of further concessions on PRSI under review. I would hope having regard to the primary objective of the Social Insurance Fund, which is to provide pensions and benefits for workers, to continue down the road of shaping the PRSI system so as to encourage employment. In this context the needs of particular sectors such as the services sector will be kept under review.