The Government is committed to enhancing the position of the self-employed through improving the level of PRSI based benefits available to self-employed people and through a supportive tax regime.
Self-employed persons are liable for PRSI at the Class S rate of 4% which covers them for access to long-term benefits such as State pension (contributory), widow's, widower's or surviving civil partner's pension (contributory), invalidity pension, as well as some treatment benefits, maternity and paternity benefit, adoptive benefit and guardians payment (contributory). Class S contributions do not provide access to short-term social insurance benefits such as illness benefit. However, the means tested supplementary welfare allowance scheme may be available to those who are experiencing financial difficulty.
Self-employed contributors have been covered for invalidity pension since December 2017. This gives the self-employed access to a safety-net of income supports if they become permanently incapable of work as a result of a long-term illness or disability without a means test.
It is the Government’s intention to keep under review the further extension of benefits to self-employed people. In doing this, it will take account of results of the 2017 survey of self-employed workers, which indicated that self-employed people are open to paying a higher rate of social insurance in return for additional benefits, and the actuarial review of the social insurance fund which was undertaken by KPMG. This review found that the combined cost of introducing the invalidity, illness, jobseeker’s and carer’s benefits for class S contributions was estimated to be €223 million for 2020. The review indicated that PRSI rates for the self-employed would need to increase from the current level of 4% to 7.8% to ensure a revenue neutral outcome. The actuarial review will play an important role in informing the overall debate on policy developments in relation to the Social Insurance Fund including its financial sustainability, and the consideration of extending benefits for workers generally, including the self-employed.