The Deputy should note that matters related to the collection of taxes are outside the responsibility of my Department and should instead be pursued with the Office of the Revenue Commissioners as it is the primary collection agent for income tax and PRSI payments. Income tax and social insurance payable by a self-employed contributor are treated as one aggregate sum. For this reason, it is not possible to separate a person’s payments to Revenue between their tax and social insurance liabilities, or to front-load the discharge of the self-employment contributions element of their overall tax liability.
To qualify for a State Pension (Contributory), a person must satisfy a number of qualifying conditions including commencing insurable employment before the age of 56 years and having a minimum of 520 qualifying PRSI contributions. A person approaching their 66th birthday may submit an application for State Pension (Contributory) but will not qualify for pension unless and until he or she fully satisfies all of the eligibility conditions.
With respect to self-employed people, social insurance contributions (Class S PRSI) were introduced on 6th April 1988. Self-employed workers who earn €5,000 or more in a contribution year are liable to pay social insurance contributions at the class S rate of 4%, subject to a minimum annual payment of €500. Such contributors are currently covered for a wide range of social insurance benefits including State Pension (Contributory), Widow's, Widower's or Surviving Civil Partner's Pension (Contributory), Guardian’s Payment (Contributory), Maternity, Adoptive and Paternity benefits, treatment benefits, Invalidity Pension and Partial Capacity Benefit.
The Social Welfare Consolidation Act 2005, as amended, stipulates that a self-employed contributor shall not be regarded as satisfying the qualifying conditions for State Pension (Contributory), unless the person has paid self-employment contributions in respect of at least one year prior to reaching age 66 and all outstanding self-employment contributions have been paid by him/her in full.
Where contributions are paid subsequent to a claimant’s 66th birthday, State Pension (Contributory) can only be awarded from the date on which the self-employment liability has been fully discharged. These provisions are consistent with the contributory and solidarity principles underpinning the social insurance system.
I hope this clarifies the matter for the Deputy.
