asked the Minister for Social Welfare the extra revenue accruing to the social insurance fund if (a) the public service were to be levied for social insurance, over the next three years, on the basis as social insurance is proposed to be levied on the self-employed and (b) if all income, without upper limit, were to be leviable to social insurance contributions.
Written Answers. - Social Insurance Fund.
125.
Under the social insurance system, permanent and pensionable public servants are covered for contributory widow's pension, contributory orphan's allowance and deserted wife's benefit. The social insurance element of their PRSI contribution is 2.75 per cent, employer 1.85 per cent and employee 0.9 per cent.
The social insurance schemes which it is proposed to extend to the self-employed are contributory old age pension, contributory widow's pension and contributory orphan's allowance. The proposed rates of social insurance contribution to be applied to self-employed contributors, as announced in the budget, are 3 per cent from April 1988, 4 per cent from April 1989 and 5 per cent from April 1990. If the present 2.75 per cent rate appropriate to public servants was raised to these levels, the additional income arising over the next three years would be as follows: 1988, £4 million; 1989, £21 million; 1990, £43 million.
These additional amounts would however be a relief to the Exchequer only if all of the increased contribution rates were levied against the employee. The present contribution of 2.75 per cent is divided between employer and employee in the ratio 1.85 per cent to 0.9 per cent. If that ratio were to be maintained with the increased rates there would obviously be a cost in similar proportion to the Exchequer as employer.
The additional income in a full year if existing social insurance rates, including a rate of 3 per cent for the self-employed, were applied without an income ceiling would be £83 million.