I propose to take Questions Nos. 68 and 80 together.
The cost of reducing the current higher rate of employer's PRSI by 1 per cent, from 12 per cent to 11 per cent, is estimated at £76 million in a full year, starting in April 1997. The cost of reducing the current lower rate of employer's PRSI by 1 per cent, from 8.5 per cent to 7.5 per cent, is estimated at £39 million in a full year, starting in April 1997.
The exemption limit for employee's PRSI was abolished in the 1996 budget. Instead, the employee's PRSI allowance was increased from £50 per week to £80 per week with effect from 6 April 1996. The cost of increasing the employee's PRSI allowance from £80 per week to £110 per week is estimated at £65 million in a full year. The estimated cost of increasing the weekly allowance from £80 to £140 is £125 million in each case starting from April 1997.
With regard to the current 1996-97 tax year, the cost of a 1 per cent reduction in the higher rate of employer's PRSI which applied up to 5 April 1996, from 12.2 per cent to 11.2 per cent, would have been about £70 million in a full year. The cost of reducing the then lower rate of employers' PRSI by 1 per cent from 9 per cent to 8 per cent, would have been about £30 million in a full year, assuming that the earnings limit for the lower rate remained unchanged at £231 per week. The cost of increasing the employee's PRSI allowance from £50 to £110 per week would have been about £120 million per year, while increasing this allowance from £50 to £140 per week would have been over £200 million per year.