Dáil Éireann Debate, Tuesday - 16 October 2018
615. Deputy Peter Burke asked the Minister for Employment Affairs and Social Protection the way in which a self-employed person can pay PRSI reckonable contributions for their State pension, contributory, up to the date the person turns 66 years of age in that year, as is available to a PAYE worker (details supplied); and if she will make a statement on the matter. [41973/18]
View answerAs Revenue does not have the facility to collect a part of a year’s PRSI liability in respect of the individual’s 66th year, payment can be facilitated by the Department’s Client Eligibility Services, Department of Employment Affairs & Social Protection, Government Buildings, Cork Road, Waterford.
In general PRSI is charged on income, including income from self-employment, where the individual is over 16 years and under pensionable age, currently 66 years. Self-employed persons, who earn €5,000 or more in a contribution year, are liable for PRSI at the Class S rate of 4%, subject to a minimum annual payment of €500. The payment of Class S contributions entitles self-employed workers to a range of benefits including State pension (contributory).
The regulations governing the award of Class S social insurance prescribe that where a self-employed person is assessed as being liable for a compulsory insurance charge, the person is granted a full annual complement of 52 ‘Class-S’ contributions for that tax year once the liability is discharged (irrespective of whether their self-employment was pursued throughout the year, or if it was just for a portion of the year). Therefore, in a self-employed person’s initial year of assessment of having an insurance liability, on payment of the due amount, the person will be recorded as having paid 52 weekly contributions for that year.
Where the self-employed discharge their combined Income Tax, USC and PRSI liability through Revenue’s self-assessed system of collection, a single payment is made in respect of their combined liability for all complete tax years up to and including the year in which the self-employed worker reaches their 65th year.
Such additional (66th year) S Class contributions may be used, where necessary, to satisfy the ‘minimum 520 paid contributions’ condition for State pension (contributory) eligibility, but cannot be used in the yearly-averaging assessment of pension rate entitlement, for which the cut-off point in totalling contributions is the end date of the immediately preceding (full) tax year. This is exactly the same ‘66th year’ approach that is facilitated in the case of standard employees (rather than self-employed) who may require some additional contributions to satisfy the “520 contribution” condition.
I hope this information is helpful to the Deputy.
