Both my colleague, the Minister for Social Welfare, and I have previously answered questions from the Deputy on this topic. It might be useful if I were to outline again the general rules which apply in this area and the thinking behind them.
In 1994, a review of the treatment of maintenance payments for the purposes of levies and PRSI was undertaken by officials of my Department, the Office of the Revenue Commissioners and the Departments of Social Welfare, Health and Enterprise and Employment. With regard to the health contribution and employment and training levy, it was agreed they should not be imposed on that part of the payer's income which is paid to his or her separated spouse under an enforceable maintenance agreement. The appropriate changes in the law were included in the Social Welfare Act, 1995, and had effect from 6 April 1995. This brings the treatment of maintenance payments for the purposes of the levies into line with their treatment in the income tax system.
The interdepartmental review involving separated spouses also concluded there should be no change in the PRSI treatment of maintenance payments. The payment of separate PRSI contributions enables each spouse to build up a social insurance record in their own right, and they can both, in due course, qualify for a pension. A provision in the Divorce Act, extends this treatment to people who obtain divorces within this country.
Entitlement to a social insurance pension is a valuable right and affords protection to separated or divorced spouses. It is, therefore, important for the protection of their individual pension rights that social insurance contributions be made by the recipients of maintenance payments. Maintenance payments are not regarded merely as a transfer from one individual to another, but in these circumstances each individual's income is regarded as being a separate entity for social insurance purposes. The logic behind both parties paying PRSI is that social insurance contributions confer substantial benefits on the contributor and ensure an adequate level of social protection. It is believed the arrangement whereby recipients of maintenance payments make social insurance contributions is equitable.
It appears the Deputy is seeking to equate, for PRSI purposes, the treatment of a married couple with that of a separated couple. It must be accepted that a separated or divorced couple are now two distinct entities whose pension rights should be individually catered for, rather than as a single unit, which clearly they are not.
In relation to introducing a tax allowance for PRSI purposes, I have no plans to introduce such an allowance either for separated or divorced persons on equity grounds or in general on the grounds of cost.
