Dáil Éireann Debate, Tuesday - 16 January 2018
1623. Deputy Willie O'Dea asked the Minister for Employment Affairs and Social Protection the full-year cost of extending jobseeker's payments to the self-employed, in tabular form; and if she will make a statement on the matter. [1229/18]
View answerThe jobseeker’s schemes provide income support for people who have lost work and are unable to find alternative full-time employment. The 2018 Estimates for my Department provide for expenditure this year on the jobseeker’s schemes of €2.17 billion.
The issue of extending additional social insurance benefits to the self-employed paying Class S PRSI was considered in the Actuarial Review of the Social Insurance fund (SIF) as at 31 December, 2015, which I published on the 18th October 2017. As part of the review the independent consultants were required to project the additional expenditure if a number of additional benefits, including jobseeker’s benefit, were extended to Class S self-employed workers and the PRSI contribution rates required to provide these benefits on a revenue neutral basis.
The review found that the combined cost of introducing the invalidity, illness, jobseeker’s and carer’s benefits for Class S contributions is estimated to be €118 million in 2018, rising steadily to €223 million in 2020.
The table below shows, the projected cost of the jobseeker’s benefit scheme under the current qualification criteria; the aggregate projected cost under a scenario whereby jobseeker’s benefit is extended to Class S self-employed contributors from 2018 onward; and the difference between the two which reflects the cost of extending the payment to Class S contributors. For example, the cost in 2018 as per the table below would be €45 million, rising to €81 million in 2025.
|
Year |
Jobseeker's Benefit Expenditure (€ millions) |
||
|
|
Total JB expenditure reflecting those currently entitled only |
Total JB expenditure reflecting class S in addition |
Incremental JB expenditure due to extension |
|
2018 |
301 |
346 |
45 |
|
2019 |
282 |
340 |
58 |
|
2020 |
291 |
351 |
60 |
|
2021 |
304 |
367 |
63 |
|
2022 |
318 |
385 |
67 |
|
2023 |
336 |
407 |
71 |
|
2024 |
354 |
429 |
75 |
|
2025 |
375 |
455 |
81 |
|
2030 |
410 |
500 |
91 |
|
2035 |
453 |
556 |
103 |
|
2040 |
500 |
613 |
112 |
|
2045 |
547 |
670 |
123 |
|
2050 |
581 |
705 |
125 |
|
2055 |
624 |
758 |
134 |
|
2060 |
671 |
815 |
144 |
|
2065 |
737 |
895 |
158 |
|
2070 |
820 |
1,000 |
179 |
|
2071 |
840 |
1,025 |
185 |
The projected expenditure on jobseeker’s benefit assumes the same incidence rate as prevails in the employed (PRSI Class A) population and that the same scheme rules would apply were the scheme extended to the self-employed.
The review indicates that, where these benefits are extended to the self-employed, the class S rate of PRSI contribution would need to increase substantially in order to ensure that the benefits are delivered in a revenue neutral manner. It estimates that when expenditure on the additional benefits is considered over the entire projection period, PRSI rates would need to increase by 94% for all additional benefits, or by 14% in respect of jobseeker’s benefit, under a scenario of no subvention from the Exchequer.
This increased contribution is attributable to the costs of extending these additional benefits to PRSI Class S contributors. It does not take account of the value to PRSI Class S contributors of access to the range of existing benefits, and in particular state pension contributory.
It is important to note that the jobseeker’s allowance scheme, which is a means-tested payment, is available to all jobseekers, including employees and those in self-employment.
