Dáil Éireann Debate, Wednesday - 27 January 2021
492. Deputy Éamon Ó Cuív asked the Minister for Social Protection the reason funding was transferred from the Social Insurance Fund to the Exchequer in 2020; if the funding will be repaid over time to the fund to fund a future shortfall in PRSI receipts as against expenditure that might arise in the social welfare contributory system; and if she will make a statement on the matter. [3683/21]
View answerCertain expenditure on the Pandemic Unemployment Payment (PUP) made before 5 August 2020 was charged to the Social Insurance Fund, having previously been charged to the Department's Vote. This expenditure related to many PUP recipients who had an underlying entitlement to Jobseeker’s Benefit or Jobseeker’s Benefit (Self-Employed).
The Pandemic Unemployment Payment (PUP) was introduced on 13 March 2020 to provide emergency financial aid to employees who had lost their job or had been temporarily laid off due to the COVID-19 pandemic and to self-employed workers where their trading income had ceased due to COVID-19. Between March and August 2020, the entirety of PUP expenditure was charged to Vote 37.
The Social Welfare (Covid-19) (Amendment) Act 2020, enacted on 5th August, provides that: “Benefit to be paid or provided for out of the Social Insurance Fund shall include such sums as the Minister may estimate on the basis that may be agreed between the Minister and the Minister for Public Expenditure and Reform in respect of the payments, commonly known as the pandemic unemployment payments, made under section 202 on and after 13 March 2020 to the relevant date”.
This provision allows for charging of a proportion of PUP expenditure prior to August 2020 to the Social Insurance Fund, rather than the Vote, on the basis that many PUP recipients would, in ordinary course, have qualified for Jobseeker’s Benefit or Jobseeker’s Benefit (Self-Employed). Following enactment, over €1.8 billion of pre-August PUP expenditure was charged to the Social Insurance Fund.
The Exchequer funds shortfalls in the Social Insurance Fund through a Subvention to cover any deficit of income over expenditure in the Fund. An Exchequer Subvention to the Social Insurance Fund was used in the past, from 1953 to 1997 and from 2010 – 2015 to fund expenditure where there was a shortfall in income from PRSI receipts.
It is expected that the Social Insurance Fund will be in deficit during Quarter 1 of 2021, at which time a Subvention from the Exchequer to the Social Insurance Fund will be required.
The transfer of funding between the Exchequer and the Social Insurance Fund in the future will be dependent on the buoyancy of PRSI receipts and the demands on expenditure, including contributory pensions, to be funded from the SIF over time.
