Dáil Éireann Debate, Thursday - 18 July 2013
307. Deputy Patrick Nulty asked the Minister for Social Protection the amount of money that would be raised in a full year by applying PRSI to rental income; and if she will make a statement on the matter. [36751/13]
View answer361. Deputy Joanna Tuffy asked the Minister for Social Protection if she will provide an update on PRSI chargeable on rent; and if she will make a statement on the matter. [36756/13]
View answerI propose to take Questions Nos. 307 and 361 together.
All workers pay PRSI on their earnings from employment. If an employee has earned income from self-employment, PRSI as a self-employed contributor is also payable on the profits from that self-employed activity as well as from any other unearned income the individual may have. Similarly a self-employed contributor (who is not an employee) pays PRSI on both earned and unearned income. However if an employee has unearned income only, there is no PRSI charge on the unearned income. Unearned income includes rental and investment income as well as income from dividends, deposits and savings and from overseas investments.
In Budget 2013 the Minister for Finance indicated that the income base on which PRSI is charged will be broadened, consequently I introduced the following measures:
- With effect from 1 January 2013 modified rate contributors with additional earned self-employed income (from a profession or trade) and any other unearned income (such as rental income) became liable to PRSI at the rate of 4% on all such income:
- In 2014, the exemption from PRSI applying to all employees who have no additional self-employed earned income but who do have unearned income only (such as rental income), will be abolished, such income will become liable to PRSI at the rate of 4%.
Social Insurance applies to persons over the age of 16 years and under pensionable age, which is currently age 66 years. Those aged 66 years and over are not liable to pay PRSI on any of their income including their unearned income. Accordingly those over 66 years will not be impacted by this change.
In general the rules which apply to income for taxation purposes also apply to income for the purposes of charging PRSI.
It is not possible to identify the amount of income raised by the application of PRSI to rental income in any year.
