As the Deputy may be aware, the Tax Strategy Group, chaired by the Department of Finance and comprising of senior officials from a number of Departments and Offices, is not a decision making body. Papers produced by Departments and discussed by the Group are simply a list of options and issues to be considered in the budgetary process.
One of the papers brought to the Group for discussion was prepared by officials of the Department of Employment Affairs and Social Protection and relates to PRSI for self-employed workers.
There has been an extensive expansion of access to the range of social insurance benefits by self-employed social insurance contributors in recent years without any increase in the 4% rate of contribution made by them. In effect, self-employed contributors, in return for a contribution of 11 percentage points lower than the combined employer and employee contribution of 15.05% made in respect of employed contributors, have access to benefits which comprise over 90% of the value of all benefits available to employed contributors.
The proposal in the Department's paper is an approach to adjust the rate of PRSI being paid by self-employed workers, currently 4%, to the standard employer rate of 11.05% over a period of four years. The underlying rationale for the proposal is to bring greater coherence to the social insurance system from a contribution/benefits perspective as well as to better balance the contribution base across employment types.
A commitment in the Programme for Government is to give consideration to increasing all classes of PRSI over time to replenish the Social Insurance Fund to help pay for measures and changes to be agreed including to the State pension system, improvements in short-term sick pay benefits, parental leave benefits, pay-related jobseeker's benefit and treatment benefits. It is expected that the proposal in the Department's paper will inform that consideration.
I trust this clarifies the matter for the Deputy.