Dáil Éireann Debate, Tuesday - 28 June 2016
282. Deputy Eoin Ó Broin asked the Minister for Social Protection further to Parliamentary Question No. 94 of 7 July 2015, why officeholders who pay under the pay-related social insurance payment class of K do not receive any social insurance entitlements; and if he will reconsider his Department's position on this. [18210/16]
View answerSince January 2011, public office holders pay PRSI at the Class K rate of 4% on their income as an office holder, provided that income exceeds €5,200 a year.
Public officeholders include the President, members of both Houses of the Oireachtas, members of the Judiciary, the Attorney General, the Comptroller and Auditor General, and city and county councillors.
All public office holders are liable to pay the contribution regardless of age. Payment of Class K PRSI does not establish any social insurance entitlements.
Prior to the introduction of the Class K charge, all public office holders were exempt from PRSI on their income as a public office holder. Then, as now, they could establish and protect their social insurance entitlements based on their non-office holder activities or through the payment of Voluntary Contributions.
The Class K PRSI charge for public office holders was introduced on the basis that public office holders were a group who unlike most self-employed and employees did not pay a 4% contribution and so has a lower marginal rate of income tax/USC and PRSI.
I am currently examining whether changes are required to the basis on which class K is charged for councillors. There are a number of possible approaches including removing the Class K charge from councillors, bringing them into cover under Class S or, alternatively, Class A or retaining the status quo. Any changes to the current Class K arrangements will need to take into account the social insurance and occupational pension position of office holders generally.
Before making any decision on this matter I will ensure that any relevant Ministers and representatives groups are consulted.
