Dáil Éireann Debate, Wednesday - 3 October 2012
131. Deputy Seán Ó Fearghaíl asked the Minister for Social Protection if she has given consideration to the matter of introducing a voluntary PRSI rate for self employed persons; and if she will make a statement on the matter. [42225/12]
View answerIn general, the current system of social insurance operates on a mandatory basis only and does not provide for voluntary participation on the part of contributors.
Self-employed persons are liable for PRSI at the Class S rate of 4% which entitles them to access long-term benefits such as State pension (contributory) and widow's, widower's or surviving civil partner's pension (contributory). Ordinary employees who have access to the full range of social insurance benefits pay Class A PRSI at the rate of 4%. In addition, their employers make a PRSI contribution of 10.75% in respect of their employees, resulting in the payment of a combined 14.75% rate per employee under full-rate PRSI Class A. (For employees earning less than €356 per week, the rate of employer’s PRSI is 4.25%).
Any changes to the PRSI system to extend additional social insurance benefits to self-employed persons would have significant financial implications and would have to be considered in the context of a much more significant rise in the rate of contribution payable, which could not be introduced on a voluntary basis.
