Self-employed persons are liable for pay related social insurance (PRSI) at a 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). This compares to employees in respect of whom a combined 14.75% rate, under full-rate PRSI Class A, is paid giving entitlement to the full range of social insurance benefits.
In general, where persons do not qualify for social insurance benefits they may claim means tested social assistance payments. For example, any person of working age who does not qualify for jobseeker’s benefit may claim means tested jobseeker’s allowance. Subject to means and other qualifying conditions, self-employed persons may claim jobseeker’s allowance if their business ceases or there is reduced demand for their services. Typically over 80% of jobseeker’s allowance claims from self-employed persons have been awarded over recent years.
Where a person or their spouse engages in self-employment, income from that employment is assessable as means which will typically reduce the amount of jobseeker’s allowance payable. While social welfare local offices provide advice to customers in relation to their welfare entitlements it is not the policy of the Department to advise claimants or their dependants to give up employment.
It may also be noted that while family income supplement is not available to self-employed persons the Advisory Group on Tax and Social Welfare, which has already reported to me on a number of important policy areas, is now looking at a range of issues in relation to working age supports. This work includes consideration of family income supplement.
