Written Answers. - PRSI Payments on Maintenance Income.
Michael McDowell
Ceist:
46
Mr. M. McDowell
asked the
Minister for Social Welfare
the recent progress, if any, that has been made by the inter-departmental groups studying the imposition of PRSI on maintenance payments between married persons; whether PRSI is payable on maintenance of children; and if he will make a statement on the matter.
[11608/96]
Discussions involving officials of my Department, the other interested Departments — Finance, Health, Enterprise and Employment — and the Office of the Revenue Commissioners on the issue of payment of PRSI and levies on maintenance income were concluded in 1995.
In response to an earlier parliamentary question from Deputy Clohessy, I informed the House on 4 October 1995, Dáil Debates, columns 1033 and 1034, that a consensus emerged from the discussions referred to above that no change should be made to the treatment of social insurance contributions on the grounds that they form the basis of individual entitlements to social welfare benefits.
Social insurance contributions confer substantial benefits on the contributor and ensure an adequate level of social protection. I believe the arrangements whereby recipients of maintenance payments make social insurance contributions is equitable. The effect of both spouses making PRSI contributions is that each spouse builds up a social insurance record in their own right. In this way, for example, each spouse can, in due course, qualify for a retirement or old age (contributory) pension.
This is preferable to one spouse being deemed an adult dependant of the other or, alternatively, having to undergo a means test for entitlement to an old age (non-contributory) pension.
Entitlement to a social insurance pension is a valuable right. I feel that coverage under the system should be extended as widely as possible and should afford protection to separated spouses. It is, therefore, appropriate that social insurance contributions be made in respect of income from maintenance payments.
It was agreed in the course of the interdepartmental discussions referred to above that the health contributions and the employment/training levies should not be imposed on that part of the maintenance payer's income which is paid to his or her separated spouse under an enforceable maintenance contract. This was done on the basis that no specific benefits accrue to individuals on foot of paying these levies. The exemption was implemented in the Social Welfare Act, 1995, with effect from 6 April 1995. This brings the treatment of the levies into line with that of the tax system. Finally, maintenance payments made in respect of children are not subject to PRSI in the hands of the maintenance recipient.
