Dáil Éireann Debate, Tuesday - 28 November 2006
331 Mr. J. O’Keeffe asked the Minister for Social and Family Affairs if there is a discriminatory distinction as regards exemptions from PRSI contributions in respect of contributions made for pension provisions as between workers who are on PAYE and those who are self employed; the basis for this discrimination; and his plans for dealing with same. [40418/06]
View answerSocial welfare legislation provides for payments made towards future pension provision by either an employed contributor in receipt of reckonable earnings, or a self-employed worker who is in receipt of reckonable emoluments and pays income tax through the PAYE system, to be exempted from liability for PRSI contributions.
With regard to self-employed contributors who are outside the PAYE system, there is no provision for payments made towards future pension provision to be exempted from liability for PRSI contributions.
A direct comparison between the assessment of self-employed contributors who pay their PRSI through the self-assessment system and those who pay PRSI Class S through the PAYE system is not sustainable. While each is liable for social insurance contributions at a rate of 3 per cent, the basis for the assessment differs. For the self-employed on self-assessment, there is provision for the deduction of capital allowances, a provision which is not available to Class S contributors on the PAYE system. As such, the question of discrimination against the self-employed in the provision of benefits does not arise.
In all, I consider that the arrangements outlined above are not discriminatory and that they represent a reasonable response to the social security requirements of self-employed workers generally.
