Self-employed persons are liable for PRSI at the Class S rate of 4% which entitles them to access long-term benefits such as State pension (contributory) and widow's, widower's or surviving civil partner's pension (contributory). Ordinary employees who have access to the full range of social insurance benefits pay Class A PRSI at the rate of 4%. In addition, their employers make a PRSI contribution of 10.75% in respect of their employees, resulting in the payment of a combined 14.75% rate per employee under full-rate PRSI Class A. (For employees earning less than €356 per week, the rate of employer's PRSI is 4.25%).
Any changes to the PRSI system to extend the full range of social insurance benefits, to self-employed persons would have significant financial implications and would have to be considered in the context of a much more significant rise in the rate of contribution payable. I established the Advisory Group on Tax and Social Welfare last year to meet the commitment made in the Programme for Government. Among the issues that the Advisory Group is currently considering is the issue of providing social insurance cover for self-employed persons in order to establish whether or not such cover is technically feasible and financially sustainable. In addition, the Actuarial Review of the Social Insurance Fund, which is due to be completed in mid-2012, will examine this matter.
Self-employed individuals who fall on hard times or are without work for some time may establish entitlement to assistance-based payments. Those who have been previously self-employed can apply for the means-tested jobseeker's 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 and, in the current climate, account is taken of the downward trend in the economy. As in the case of a non-self-employed claimant for assistance-based payments, the means of husband/wife, civil partner or co-habitant will be taken into account in deciding on entitlement to a payment.