Dáil Éireann Debate, Wednesday - 23 May 2018
193. Deputy Maurice Quinlivan asked the Minister for Employment Affairs and Social Protection if her Department has calculated the estimated cost to the State of bogus self-employment per annum; if so, the potential cost per annum; and if she will make a statement on the matter. [22786/18]
View answerThe report on “The use of intermediary-type structures and self-employment arrangements: Implications for Social Insurance and Tax Revenues” was published on 31 January 2018. This followed a public consultation which received 24 submissions from interested parties, including employers, trade unions, professional bodies and individuals.
The report found that the available data does not indicate that self-employment is accounting for any significant increased share of the labour force, and accordingly the perception of the level of disguised employment or false self-employment may be overstated. While the report indicates that intermediary employment arrangements can be abused to the detriment of workers and can distort the transparent and efficient operation of the labour market, it also notes that contract for service arrangements can provide flexibility, in many instances, for both businesses and workers, where they are freely chosen by both parties.
The report estimates potential losses based on various employment and earnings scenarios. The potential loss from various self-employment arrangements ranges from c €5,000 per annum at average industrial earnings, c €9,000 per annum at an earnings level of €60,000 and c €15,000 per annum at a salary of €100,000.
There are an estimated 15,000 people employed in personal service companies and managed service companies. The estimated gain to the Exchequer and Social Insurance Fund would be between €30 and €60 million per annum if a proportion of these workers (25 to 50 per cent) were employed under a contract of service and subject to PAYE.
On 7 May last, my Department began a significant campaign through national media on false self-employment, to raise awareness of the service it provides to determine people’s correct employment status. This campaign, which was recommended in the report, is aimed at ensuring that there is better public awareness of the important service the Department provides in determining employment status. The campaign response should help the Department in better understanding the scale and nature of false self-employment.
