Self-employed workers, including farmers, are liable to pay PRSI at the class S rate of 4%, subject to a minimum annual payment of €500, where their annual income exceeds €5,000. Class S contributors are entitled to a range of long-term payments including State pension (contributory), based on their own PRSI contribution record while working. Entitlement to benefits cannot be generated based on someone’s PRSI record, including that of a spouse (other than for the Widow/er’s/Surviving Civil partners’ Contributory Pension).
The status for PRSI purposes, of spouses working in a family business or on a family farm can vary, depending on the circumstances.
Spouses who are engaged in a business partnership are each treated as individual self-employed contributors. Provided each has annual income in excess of the €5,000 threshold, they are individually liable to pay PRSI under Class S. In addition, since 2014, spouses who assist in the business of their self-employed spouse/civil partner performing the same or ancillary tasks and are not a business partner or an employee, can be regarded as a self-employed contributor in their own right.
These contributions enable them to build up an insurance record in their own right and receive accruing benefits including State pension (contributory).
Alternatively, where a family business/farm is incorporated as a limited company, spouses involved in the business pay PRSI contributions either as employees or as self-employed contributors depending on whether a contract of service exists. In addition where a person is an employee of a partnership in which their spouse/civil partner is a partner, he/she pays PRSI contributions as an employee.
Otherwise, a person employed directly by his/her spouse is not liable to pay PRSI, as this is regarded as an “excepted employment” under social welfare legislation which recognises the practical difficulties in establishing the existence of a genuine employment relationship in such circumstances.