Dáil Éireann Debate, Thursday - 17 July 2014
327. Deputy Róisín Shortall asked the Tánaiste and Minister for Social Protection her plans to deal with the anomalous position whereby an employee who is earning €18,304 requires a pay rise of over €1,000 to secure an increase in their take-home pay due to the step effect of current PRSI banding arrangements. [32086/14]
View answerEmployee PRSI is not charged where weekly earnings are €352 or less which is equivalent to €18,304 per annum. Where weekly earnings exceed €352, employees become liable for PRSI which is charged at 4% on all earnings. While the effect of paying PRSI on all earnings once the €352 employee threshold is exceeded, is an issue, the yield from those paying PRSI contributes to keeping workers on lower earnings (below the threshold) outside of the PRSI net.
Family Income Supplement (FIS) is available for lower paid workers with families, whose income falls below the relevant thresholds. The level of FIS entitlement is based on net income after all relevant deductions, including the deduction of PRSI. The payment effectively preserves the incentive to take up or remain in employment in circumstances where the employee might only be marginally better off than if he or she were claiming other social welfare payments.
