My colleague, the Minister for Finance, announced, as part of Budget 2001, a package of PRSI measures. These included a reduction of 0.5%, to 4%, in the main employee rate; the abolition of the employer ceiling; a reduction of 2% to 3%, in the rate of social insurance applicable to the self-employed, and the abolition of the annual earnings ceiling for the self-employed.
The abolition of the employer ceiling will yield £24 million in 2001 and £159 million in a full year. The abolition of the self-employed ceiling will yield £40 million in 2001 and £97 million in a full year. When the reductions in PRSI rates, which I mentioned earlier, are factored in, the overall impact of these changes is a cost of £7 million to the social insurance fund in 2001 and a yield of £117 million in a full year. The budget also made provision for unprecedented levels of increase in the rates of benefits and pensions payable from the fund. These will cost nearly £203 million in 2001 and more than £270 million in a full year. Accordingly, the net cost of all the changes relating to the social insurance fund introduced in the recent budget is £210 million in 2001 and £153 million in a full year. As the Deputy is aware, the fund is in a healthy financial state at present. This is due to increased levels of employment, lower levels of unemployment and the buoyant economic climate generally. This surplus will not continue indefinitely as ageing of the population will greatly increase demands on the fund over the medium to long term, an issue to which the Deputy referred earlier in regard to social protection. Clearly, it is important that the fund's surplus should be used to best advantage having regard to emerging demands and the overall interest of its contributors. As announced recently, the Minister for Finance and I are arranging to have an early examination of possible strategies in this regard.