PRSI budget increase proposed in return for welfare safety net –

SELF-EMPLOYED people will face a large PRSI hike in the budget in return for enjoying the safety net of social welfare benefits if the Government adopts a proposal from an expert group.

The self-employed pay social insurance contributions at 4 per cent in order to be eligible for their limited entitlements, while employers and employees together pay 14.75 per cent, enabling employees to obtain a greater range of benefits.

Minister for Social Protection Joan Burton will be advised to raise the PRSI contribution of self-employed people by the advisory group on tax and social welfare, with an increase from 4 per cent to 17.3 per cent among the options expected to be presented.

Due to the recession, large numbers of previously self-employed people have attempted to access social welfare supports for the first time only to discover their entitlements are limited compared to those available to people who have been employed by others.

Self-employed people cannot access jobseeker’s benefit and illness cover, although they get the same State contributory pension provisions as employees.

Ms Burton asked the group to explore whether providing social insurance cover for self-employed people was “technically feasible and financially sustainable”. The group based its discussions on an actuarial review of the social insurance fund carried out by KPMG.

The review found that the annual rate of social insurance contribution required from the self-employed to cover the cost of the State contributory pension would be 15 per cent. Close to 16 per cent would be necessary if jobseekers benefit was included with the State contributory pension, while the figure rose to 17.3 per cent if invalidity pension was also factored in.

via PRSI budget increase proposed in return for welfare safety net – The Irish Times – Wed, Oct 10, 2012.

via PRSI budget increase proposed in return for welfare safety net – The Irish Times – Wed, Oct 10, 2012.

State will face €324bn shortfall over pensions – The Irish Times – Wed, Sep 12, 2012

THE GAP between the State’s future pension and social welfare liabilities and revenues to fund them stands at €324 billion, according to an unpublished report commissioned by the Government, which has been seen by The Irish Times. That figure is almost twice the size of the national debt as it currently stands.

The review of the Social Insurance Fund – the pot into which about €8 billion in pay-related social insurance contributions (PRSI) go to fund a range of benefits – was commissioned by the Department of Social Protection. Last year the fund’s annual shortfall stood at €1.5 billion, or 1.1 per cent of gross national product.

via State will face €324bn shortfall over pensions – The Irish Times – Wed, Sep 12, 2012.

via State will face €324bn shortfall over pensions – The Irish Times – Wed, Sep 12, 2012.