Dáil Éireann Debate, Tuesday - 20 June 2017
2066. Deputy Niall Collins asked the Minister for Social Protection the cost of extending social protection supports to the self-employed and permitting such persons to opt into the existing class A structure for jobseeker’s benefit paying the rate corresponding to their income level based on the last published actuarial review of the social insurance fund. [28400/17]
Amharc ar fhreagraThe Programme for a Partnership Government contains a commitment “to introduce a PRSI scheme for the self-employed and provide a supportive tax regime for entrepreneurs and the self-employed ”. Significant progress was made on this commitment in Budget 2017. Self-employed contributors now have access to treatment benefits since last March and, from December next will have access to invalidity pension. This is a real and progressive advance in the provision of social protection to the self-employed.
My Department is currently examining the extension of social insurance to cover new risks and contingencies, including developing proposals on a form of jobseeker’s benefit where a person's business fails or they can no longer continue working in their profession or trade. This examination will include how such additional benefits should be financed.
A major input to this examination will be the outcome of the Actuarial Review of Social Insurance Fund which is currently being undertaken by independent consultants. The Review generally will project the income and expenditure of the Fund over a 55 year period, taking into account policy, economic and demographic changes since the previous review was undertaken. The Review is also examining the potential costs in future years of extending cover for a range of benefits, including jobseeker’s benefit to self-employed contributors. This examination will include the projected PRSI contribution rates which would be required to extend such cover on a revenue neutral basis, including the already announced extension of cover for invalidity pension. It is planned to publish the completed review next August.
The findings of the Review will play an important role in informing the overall debate on policy developments in relation to the Social Insurance Fund in the years ahead including the financial sustainability of the Fund given the expected demographic challenges and consideration of extending the scope of benefits for workers generally, including the self-employed.
The issue of allowing people to opt into social insurance cover was examined by the Advisory Group on Tax and Social Welfare in its 2013 report on the extension of social insurance coverage for the self-employed. The Group concluded that extending cover on a voluntary basis, through either an ‘opt in’ or ‘opt out’ basis, could lead to the selection of bad risks and would undermine the social solidarity and contributory principles that underline the social insurance system. The views of the Group will be further considered as part of the current examination underway by my Department.
Finally, it should be noted that one of the underlying principles of the social insurance system is that workers generally make contributions on a compulsory basis and that benefits and pensions are available, on foot of these contributions, if and when they are needed by individuals. Accordingly, the total level of benefits received by each individual over a lifetime will vary depending on the type and duration of contingencies experienced such as illness, disability, unemployment and old age. Allowing contributors to opt in and opt out of cover would mean that higher contributions would be required from those who opt in on a voluntary basis than applies under the current system.
