Skip to main content
Normal View

Social Insurance

Dáil Éireann Debate, Thursday - 19 June 2014

Thursday, 19 June 2014

Questions (77)

Ciaran Lynch

Question:

77. Deputy Ciarán Lynch asked the Minister for Social Protection the social welfare consequences for a person and the State of the wide-spread practice, especially in the pharma industry, of persons being engaged on a self-employed basis to perform duties similar to their company employee colleagues; and if she will make a statement on the matter. [26378/14]

View answer

Written answers

An individual's classification for social insurance purposes is important as it affects the rate of Pay Related Social Insurance (PRSI) which they pay on their salary or income. This in turn affects the social insurance benefits to which they are entitled. Generally an individual is classified for PRSI purposes as an employee or as self-employed.

Where an individual is classified as an employee PRSI is payable on their earnings by the employee and their employer. Generally employees 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. Class A provides employees with entitlement to the full range of social insurance benefits including short term benefits in respect of illness, unemployment and maternity as well as long term benefits such as widow/widower's or surviving civil partner’s pension and State pension contributory. Where an individual is classified as self-employed, he or she pays class S PRSI at the rate of 4% on their earned income from self-employment. Those paying class S can have an entitlement to certain short-term benefits (i.e. maternity benefit) as well as long term benefits such as widow/widower's or surviving civil partner’s pension and State pension contributory. In order to determine an individual's correct rate of PRSI, my department uses the Code of Practice for Determining Employment or Self-Employment Status of Individuals.

The report from the advisory group on tax and social welfare, published in May 2013, identified trends in the labour market which have resulted in some workers being classified as self-employed, whereas their employment characteristics would properly determine them as employees. The report suggested that in some cases persons have falsely declared themselves as self-employed so as to avail of different tax treatment. In other cases, employees have been falsely declared as self-employed so as to circumvent employer obligations under labour legislation. If the Deputy can supply my department with the details of the specific case to which he is referring, I will be happy to have it investigated and the insurability determined under the Code of Practice for Determining Employment or Self-Employment Status of Individuals.

Top
Share