As part of the various State supports for the farming sector, there is an income tax and PRSI exemption for certain income arising from the leasing of farm land. Subject to an upper limit, individuals who qualify for the relief are entitled to take a deduction in determining their “total income” for income tax purposes and “reckonable income” for the purposes of PRSI. There is no such deduction for USC.
It may be the case that if this relief is availed of for the purposes of PRSI and an individual has no other income, they may not be required to make any PRSI contributions in a given year. Self-employed people pay PRSI at the Class S rate of 4%, subject to a minimum annual charge of €500, provided their income exceeds €5,000 in that year. Once their income exceeds this threshold and PRSI is paid, Class S contributions are awarded for the full 52 weeks of that year. These contributions are reckonable towards establishing entitlement to Class S social insurance benefits, including the State Pension (Contributory). Individuals with reckonable income of less than €5,000 are not required to pay Class S PRSI.
If the Deputy wishes to provide details regarding a specific case, Revenue may be in a position to give a view on whether income tax and PRSI would arise.
The question of a person’s entitlement to the old age pension is a matter for the Department of Employment Affairs and Social Protection. Upon reaching pension age, an application may be made for the State Pension (Contributory) where they satisfy the qualifying conditions, including the qualifying PRSI conditions, or for the State Pension (Non-Contributory), where they have insufficient means and do not satisfy the qualifying conditions for the State Pension (Contributory).