Joe McHugh
Question:210 Deputy Joe McHugh asked the Minister for Social Protection the incentives offered by the State for self-employed persons who contribute Class A stamps; and if he will make a statement on the matter. [22286/10]
View answerWednesday, 26 May 2010
Questions (198)
Written answers
The range of benefits and pensions to which different groups of workers may establish entitlement reflects the risks associated with the nature of their work. This in turn reflects the rate of contribution payable. Self-employed workers are liable for PRSI at the Class S rate of 3%. They are consequently eligible for a narrower range of benefits than general employees who, together with their employers, pay a total social insurance contribution of 14.75% under the full-rate PRSI Class A.
Class S contributions provide cover for long-term benefits such as state pension (contributory) and widow's/widower's pension (contributory). However they do not provide cover for short-term benefits such as jobseeker's and illness benefits — these are only available to people covered by PRSI Classes A, E, H and P. This reflects the need for coverage for various contingencies, the rate of contributions that self-employed people pay, the practicalities of administering and controlling access to short-term payments and the annualised system of contributions that these same persons enjoy. A system of separate arrangements for employed and self-employed workers within a social insurance context is common in other European social protection systems.
In certain cases, a self-employed person, who had insurable employment in the relevant year, currently 2008, and had paid sufficient Class A contributions, may qualify for a jobseeker's benefit payment, provided all the conditions of the scheme are satisfied. A self-employed person who has paid insufficient Class A contributions may instead qualify for jobseeker's allowance. Jobseeker's allowance is a means-tested payment and in assessing a person's means for the purposes of this allowance account is taken of all income which the person may reasonably expect to receive during the succeeding year. In general their means will take account of the level of earnings in the last twelve months in determining their expected income for the following year. In the current climate account is taken of the downward trend in the economy and it is accepted that future earnings may be lower than those of previous years. The process also recognises the potential for significant upward or downward variations in income from one year to the next.
There are no immediate plans to extend cover for short-term benefits to this group of insured workers. Any such measure would have significant financial implications and would have to be considered within a budgetary context. Consideration would also have to be given to an appropriate increase in the rate of the PRSI Class S contribution.