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Social Insurance

Dáil Éireann Debate, Tuesday - 29 January 2013

Tuesday, 29 January 2013

Ceisteanna (151)

Thomas Pringle

Ceist:

151. Deputy Thomas Pringle asked the Minister for Social Protection the progress that has been made or her plans to provide unemployment benefits to the self-employed. [4036/13]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Social)

The Advisory Group on Tax and Social Welfare which I established in 2011 is charged with, inter alia, examining and reporting on issues involved in providing social insurance cover for self-employed persons in order to establish whether or not such cover is technically feasible and financially sustainable. The Advisory Group’s overall method of working is based on producing modular reports on the priority areas identified in the Terms of Reference. Where possible, the aim is to provide recommendations that can be acted upon in time for the annual budget, estimates and legislative cycle and to allow the Government to best address its commitments under the EU-IMF Programme of Financial Support. The Group has been considering the issue of social insurance coverage for the self-employed and will submit its report once its examination of the various questions has been completed.

One of the issues examined in the third Actuarial Review of the Social Insurance Fund, as at 31 December 2010, published in 2012, was the long-term cost implications to the Social Insurance Fund (SIF) and the break-even contributions rates required to provide jobseeker’s benefit to the self-employed and to provide invalidity pensions for self-employed workers. The report found that the effective annual rate of contribution, or the required contribution as a percentage of salary, needed to provide the core full-rate State pension (contributory), which is the benefit currently available to self-employed contributors, is approximately 15%. This compares favourably with the 4% rate currently paid by the self-employed. An incremental increase in contribution rates to 16% would be required if jobseeker’s benefit, in addition to core State pension (contributory), is provided. The average contribution rate required for the core State pension (contributory) plus jobseeker’s benefit and the invalidity pension is estimated to be in the region of 17.3%.

Any proposals to extend additional cover to the self-employed will have to be considered in a budgetary context, taking account of the finding of the Actuarial Review that the self-employed achieve very good value for money compared with the employed – when the comparison includes both employer and employee contributions in respect of the employed person.

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