Vol. 472 No. 8
107 Mr. Callely asked the Minister for Social Welfare the results of the review of the system of employers' PRSI contributions in the labour intensive areas; if he will list any such recommendations; whether he supports such recommendations; the likely timescale for such recommendations to be implemented; and if he will make a statement on the matter. [24219/96]
No specific study has been carried out into the system of employers' PRSI contributions in labour intensive sectors of the economy. However, an interdepartmental working group reported in December 1993 on the impact of employers' PRSI on the low paid manufacturing sector.
The group recommended that: (1) no measure should be introduced which involves different PRSI treatment depending on a general sector or labour intensity basis; (2) the cost of any concessions should be recovered through other changes in employers' PRSI rather than increased general taxation; (3) the then liability on employers of medical card holders to pay the levies in respect of employees who are medical card holders should be discontinued.
Subsequently, a tiered system of employers' PRSI was introduced with effect from 6 April 1994. The rate of employers' PRSI was reduced from 12.2 per cent to 9 per cent in respect of employees whose weekly income was less than £173. This system was improved in 1995 and again in 1996 so that the low rate is now 8.5 per cent and it applies where incomes are up to £250 per week.
Employers were relieved of liability for the levies in respect of employees who are medical card holders, with effect from 6 April 1994. These improvements were funded partly by a real increase in the earnings ceiling for employers' PRSI
In recognition of the important role played by PRSI in Irish life, I have recently launched a discussion document, Social Insurance in Ireland, to stimulate a public debate on all issues relating to this topic. I will be inviting submissions from the public in relation to all aspects of social insurance, including the question of the relationship between employers' PRSI and employment.
