Dáil Éireann Debate, Thursday - 6 July 2017
256. Deputy Niall Collins asked the Minister for Social Protection the estimated 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. [31963/17]
Amharc ar fhreagra257. Deputy Niall Collins asked the Minister for Social Protection the estimated full year cost of extending social protection supports to the self-employed and permitting such persons access to invalidity pension for three, six, nine and 12 months of a calendar year, respectively. [31964/17]
Amharc ar fhreagraI propose to take Questions Nos. 256 and 257 together.
The Deputy may wish to note that the self-employed PRSI contributors will be eligible to qualify for the Invalidity Pension scheme with effect from December next. This is a major reform as self-employed people will now have access to the safety-net of State income supports, without having to go through a means test, if they become permanently incapable of work as a result of an illness or disability. Once such a contributor qualifies for the payment, it can be paid on an indefinite basis to pension age provided the relevant person continues to satisfy the medical and other criteria.
Consideration was not given to limiting eligibility for the payment to part of calendar years only.
While the measure is being implemented without any increase in the rate of contribution paid by self-employed workers in 2017, consideration will need to be given to the funding arrangements in later years. The estimated 2018 and 2019 costs are €23m and €38m, respectively, and these will rise further in later years.
In addition, Class S self-employed contributors have access since March last to the Treatment Benefit scheme which includes free eye and dental exams, and contributions towards the cost of hearings aids.
The last Actuarial Review of the Social Insurance Fund was published in 2012 and did provide costings of extending two benefits - jobseeker’s benefit and invalidity pension - to self-employed workers on the same basis as it is paid to class A employees. It did not provide a cost for permitting self-employed workers to opt into a class A structure paying equivalent rates of contributions for cover for jobseeker’s benefit.
It should be noted, in this regard, that there would not be a direct correlation between the cost of compulsory cover (and the rates of contributions required) for any given benefit or pension for all self-employed and with the costs of an opt in (or opt out) system. The third report of the Advisory Group on Tax and Social Welfare on Extending Social Insurance Coverage for the self-employed published in 2013 examined the extension of additional cover for the self-employed on a voluntary basis and concluded that “extension 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.” Accordingly, an opt in system would require those who opted in to pay at a higher rate of contribution than would apply under a compulsory system.
The Actuarial Review referred to above was completed in 2012. A new review is now well advanced and is expected to be published next month. This review will re-examine the projected PRSI contribution rates required to fund individual additional benefits, including invalidity pension and jobseeker’s benefit to self-employed contributors. Given the improvements in the labour market and the economy generally over the period since 2012, the forthcoming review will provide a more up to date estimate of the costs of extending new benefits to the self-employed.
