Vol. 515 No. 3
169 Mr. Ring asked the Minister for Finance if he will decrease employers' PRSI to reflect the difference between the proposed wage increases and the rate of retail price inflation in the clothing and textile sectors. [6007/00]
In the context of establishing a new national training fund, I announced in budget 2000 a reduction of 0.7% in employer class A and H contribution rates from April next. I have no further plans to reduce employer contribution rates for the year 2000-01.
I remind the Deputy that, since 1994, a reduced rate of employers' PRSI has applied in respect of lower earning employees. From 6 April next, a rate of 7.8%, as compared to the standard rate of 11.3%, will apply subject to an earnings limit of £14,560 per annum. This lower rate will apply to more than half of employees insurable at class A, that is, full rate PRSI, including those in the clothing and textile sector.
In addition, the establishment from April of this year of a national training fund will have an important and beneficial impact in terms of maintaining national competitiveness. Moreover, there will be no additional financial imposition on employers as the introduction of a national training levy, payable in respect of all class A and H employees at a rate of 0.7% on the same income base as employers' PRSI, is being matched by the above mentioned reduction of 0.7% in the current employers' PRSI contribution rates.
There are several schemes of support for both employers and employees to encourage the employment of long-term unemployed from the live register. Such schemes, including revenue job assist and the back to work allowance scheme, provide additional allowances and PRSI free holidays to employers to further support the reintegration of the long-term unemployed into the labour market, an increasingly important objective given the supply constraints evident in some parts of the labour market.
