Dáil Éireann debate -
Tuesday, 10 Oct 2000

Vol. 523 No. 4

Written Answers. - Social Insurance Contributions.

Róisín Shortall

Question:

167 Ms Shortall asked the Minister for Social, Community and Family Affairs if, in view of the frequency with which ex-employees discover that their previous employer did not make the required PRSI contributions or other returns, he will issue all employees with an annual statement confirming that their employer has complied with the necessary social insurance contributions; and if he will make a statement on the matter. [21145/00]

Minister for Social, Community and Family Affairs (Mr. D. Ahern)

Social insurance contributions amounting to nearly £2.5 billion were made by employers, employees and the self-employed in 1999. The Revenue Commissioners, acting as agents for my Department, collect the vast majority of these contributions through the combined PAYE/PRSI system. In addition, a relatively small amount of social insurance contributions is remitted directly to my Department by certain employers and self-employed.

Social welfare legislation provides for the deduction and remittance of contributions. The legislation also obliges employers to maintain, for social insurance purposes, detailed records of all persons employed during the course of each tax year, to furnish returns relating to these employees and to issue, either annually or on cessation of any employment, certain statements to employees regarding social insurance contributions. Accordingly, employers make, if applicable, a PRSI deduction from their employee's wages. These contributions, along with the associated employer PRSI contribution, are normally remitted each month to the Revenue Commissioners. Within 45 days of the end of each tax year, the employer is obliged to make a return, P35, to the Revenue Commissioners which details the earnings, employee PRSI contributions, total PRSI contributions, class of PRSI applicable and number of weeks of insurable employment of each person employed during the course of that year.

Returns in relation to nearly two million employees are made each year. An employer is also obliged to issue to each employee, either on cessation of an employment or within 45 days of the end of each tax year, a statement, either P45 or P60, relating to the individual employee's PRSI and income tax history during the course of that year. Social welfare legislation also provides that an employee may, once every three months, inspect or obtain a statement of the statutory social insurance records which an employer is obliged to maintain in relation to that employee.

The Revenue Commissioners operate an active intervention management system designed to ensure that PRSI and other statutory deductions are remitted when due and that the necessary returns are made by employers. Revenue also carry out an active audit and PAYE/PRSI inspection programme on an ongoing basis. Where an employee does not receive a P60 at the end of each tax year or a P45 on leaving an employment, he or she should contact their local inspector of taxes who will initiate appropriate action.

In addition, some 600 staff in my Department are engaged full-time on anti-fraud and anti-abuse measures, a key element of which is an annual programme of employer inspections.

More than 6,100 employers have already been visited this year. As part of this inspection programme, inspectors from my Department form part of a nationwide joint inspection unit with inspectors from the Revenue Commissioners. This unit uses the combined legal powers and expertise of both organisations to tackle abuses in both the social welfare and tax systems.

Employer inspections undertaken by my Department comprise a number of tasks such as a detailed examination of employers' records to ensure that accurate records of employees are being maintained and that correct PRSI payments are being made by employers in respect of all their employees; checks to ensure that the correct class of PRSI is being deducted; outlining employers' responsibilities with regard to social welfare legislation and, where Revenue staff are part of the inspection team, tax legislation, and giving advice and information to employers on matters such as the operation of the PRSI system, incentives available to employers, employees' entitlements and the correct classes of contributions.

There is no evidence to suggest that the level of non-compliance relating to social insurance contributions is significant or increasing.

I am satisfied that appropriate mechanisms are in place to ensure that the existing provisions relating to social insurance are adhered to by employers. In particular, the P60 document which is issued after the end of each tax year by employers to each employee represents a full statement of the PRSI contribution details for that tax year. A contributor may, at any stage, obtain from my Department a detailed record of their social insurance contribution history.

In the event of an individual's record being incomplete my Department will take appropriate steps to rectify this, including the collection and recording of outstanding contributions, where necessary.

Question No. 168 taken with Question No. 163.