Dáil Éireann Debate, Wednesday - 16 September 2009
920 Deputy Paul Kehoe asked the Minister for Social and Family Affairs her view, in view of the economic situation and the effects on self-employed people, on altering the contribution system to enable those in self-employment to be able to claim jobseeker’s benefit or an equivalent payment; and if she will make a statement on the matter. [31301/09]
Amharc ar fhreagraThe range of benefits and pensions to which different groups of workers may establish entitlement reflects the risks associated with the nature of their work. This in turn reflects the rate of contribution payable. Self-employed people are liable for PRSI at the Class S rate of 3% and are consequently eligible for a narrower range of benefits than general employees who, together with their employers, pay a total social insurance contribution of 14.05%, excluding levies, under the full-rate PRSI Class A.
Self-employed workers are not insured against short-term benefits such as illness and jobseeker's payments — these are only available to persons covered by PRSI Classes A, E, H and P. This reflects the need for coverage for various contingencies, the rate of contributions that self-employed persons pay, the practicalities of administering and controlling access to short-term payments and the annualised system of contributions that these same persons enjoy. A system of separate arrangements for employed and self-employed workers within a social insurance context is common in other European social protection systems.
There are no immediate plans to extend cover for short-term benefits to this group of insured workers. Any such measure would have significant financial implications and would have to be considered within a budgetary context. Consideration would also have to be given to an appropriate increase in the rate of the PRSI Class S contribution.
Self-employed workers who do not qualify for an insurance-based benefit may establish entitlement to assistance-based payments such as Jobseekers Allowance. They can apply for the means-tested Jobseekers Allowance if their business ceases or if they are on low income as a result of a downturn in demand for their services. In general their means will take account of the level of earnings in the last twelve months in determining their expected income for the following year. In the current climate account is taken of the downward trend in the economy. It is accepted that future earnings may be lower than those of previous years and this is factored in projecting future earnings, with account being taken of the potential for significant upward or downward variations in income from one year to the next.
921 Deputy John Cregan asked the Minister for Social and Family Affairs the supports that are available from her Department for a person who was made redundant and wishes to start up their own business. [31331/09]
Amharc ar fhreagraThe Department operates a number of schemes to assist unemployed people who wish to become self-employed, namely the Short Term Enterprise Allowance (STEA) and the Back to Work Enterprise Allowance (BTWEA). The short term enterprise allowance (STEA), introduced from 1 May 2009, provides immediate access to support where people who have lost their jobs and qualify for Jobseekers' Benefit wish to set up a business. Payment under the scheme is at the same rate and for the same duration as their entitlement to Jobseeker's Benefit.
The back to work enterprise allowance (BTWEA) is designed to provide a monetary incentive for people who are dependant on social welfare payments to develop a business while allowing them to retain a reducing proportion of their qualifying social welfare payment, plus secondary benefits, over two years; 100% in year 1 and 75% in year 2. The qualifying period required for access to back to work enterprise allowance (BTWEA) is 12 months provided a person has an underlying entitlement to Jobseeker's Allowance.
Under both schemes, those taking up self-employment must first have their self-employment project approved as viable and sustainable. In partnership areas this will be done by the partnership company. In non-partnership areas this will be done by the department's local facilitator. Approval normally involves an interview with the applicant to assess the viability of the proposed project, to provide advice on funding or on "Start Your Own Business" courses and other relevant aspects.
In the context of the STEA and BTWEA schemes, the Department operates a technical assistance and training scheme (TATS) under which a participant may qualify for a grant up to a maximum of €1,000 towards certain business start-up expenses. This fund is designed to enhance the person's prospects of succeeding in becoming independent of the social welfare system through support for training in the areas of starting a business, book-keeping/accounts, preparation of business plans, marketing, literacy and computer training or assistance with the purchase of small items of equipment. It is administered through the department's facilitator network based in social welfare local offices. In addition local County Enterprise Boards offer support and advice to persons setting up their own business.
