PRSI - Crediting PRSI Contributions Unpaid or Paid after due date


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List of contents

Legislative provisions
Right of person to sue employer
Right of Minister to sue employer
PROCEDURES
Investigation
Decision
Right of Review of Adverse Decisions


CREDITING PRSI CONTRIBUTIONS UNPAID OR PAID AFTER DUE DATE

Legislative provisions

Article 70 of S.I. 312/96 directs that social insurance contributions are normally to be treated as paid on the date that they are actually paid, but provides for 3 exceptions only.

  1. PRSI contributions are treated as paid in respect of weeks for which no payment is due because the earnings ceiling has been reached [Section 13 of the Social Welfare Consolidation Act 2005].
  2. PRSI contributions may be treated as paid on the due date where they were unpaid, or paid at an incorrect rate, due to information given to the employer by an officer of this Department or by the Collector-General. This discretion can only be exercised when the contributions have (or the correct rate has) been paid.
  3. PRSI contributions which are paid after the due date, or which remain unpaid, may be treated as having been paid on the due date where it is shown to the satisfaction of the Minister that the delay or failure to pay the contributions earlier was "not to have been with the consent or connivance of, or attributable to any negligence on the part of the insured person in respect of whom the contribution is payable or is paid". ( Hereinafter referred to as "such consent or negligence").

Where such consent or negligence has occurred, the contributions cannot be treated as paid on a date earlier than that on which they were actually paid.

'Due date' for this purpose means the date on which the contribution was due to be paid.

Right of person to sue employer

An employed person or other person (e.g. a widow or orphan of the employed person) who has lost benefit as a result of his/her employer's failure or neglect to pay PRSI contributions at the due time is entitled to recover from the employer as a simple contract debt in any court of competent jurisdiction a sum equal to the amount of benefit so lost. [Section 259(1) of the Social Welfare Consolidation Act 2005].

Right of Minister to sue employer

Where a person has not taken such proceedings, the Minister may do so on his/her behalf - in his/her name. The legislation also provides for the recovery from the employer of benefit paid on the basis of contributions having been treated as paid under (3) above, or of assistance paid in lieu of benefit (e.g. where the contributions were not treated as paid on the due date).

PROCEDURES:

Re (1) If an employer, in the P35 annual return, should incorrectly count only the weeks for which contributions were paid, an amended form P60 should be obtained showing the total number of Weeks of Insurable Employment (WIES), regardless of the earnings ceiling, and the record amended accordingly.

Re (2) and (3)

Investigation

Where a question arises about whether failure to pay contributions on the due date was because of incorrect information, or that there was such consent or negligence by the employee, the matter is investigated fully by a Social Welfare Inspector. The question may come to notice on receipt of a claim for a social welfare payment by the insured person or in the course of an inspection by the Inspector. The investigation may show that a number of employees are in a similar situation. The facts of the case are established as fully as possible and a report recommending whether crediting on the due date is appropriate or not is then submitted to Client Data Services (CDS).

Where a question arises concerning pursuing the recovery of lost benefit from the employer, a report is also sent to Central Prosecutions Section. See Section 9 of the Guidelines on PRSI Inspections for the procedure followed in such cases.

Decision

A decision regarding treating the contributions as paid on the due date is made on behalf of the Minister by an officer in CDS.

Where the contributions were unpaid or paid at an incorrect rate due to incorrect information by this Department or by the Collector-General's office as in (2) above, the officer should establish whether the contributions have since been paid and, if so, arrange that they be treated as having been paid on the due date. Where the error has not been corrected by the employer, the officer should advise the employee(s) of these provisions.

Where the contributions are unpaid and, having considered the Inspector's report, the officer is of the view that the evidence indicates that the delay in payment of the contributions was with the consent or negligence of the insured person (as in (3) above), a letter will issue to the person setting out the evidence available and the implications of an adverse decision and giving him or her the opportunity of putting his/her side of the case before a formal decision is made in the matter. (See Guidelines re good procedure and Natural Justice in the Guidelines " Decision Making and Natural Justice" ).

Factors which would be deemed to indicate consent or connivance, or to constitute negligence include:

  • knowledge by the employee when accepting employment that the employer was operating in the hidden economy and did not pay PAYE or PRSI.
  • failure to give the employer an insurance card (pre April 1979) or P45.
  • failure to notify the Department of the employment when claims for benefit during the period of employment were disallowed because of the non-payment of contributions.
  • failure to claim benefits in circumstances which indicate that the employee was aware that the employer was not paying PRSI and chose not to advise the Department.
  • failure to report that a P45 was not obtained on termination of the employment.

On receipt of a response from the person in the matter (or following expiry of the time allowed for a response), the officer will make a decision in the matter and notify the person accordingly. If the decision is not favourable to the person, the notification should include

  • the reasons for the decision
  • the implications for the future e.g. in certain circumstances, title to social insurance benefits might be lost or reduced rate benefit only payable.
  • the right of the person to sue the employer for lost benefit.

Where more than one person is affected by the decision, each of them should be consulted before the decision is made and each of them should be notified individually of the decision.

Right of Review of Adverse Decisions

Where the officer decides in any case that the contributions should not be treated as paid, or should be treated as paid from a current date only, the person concerned should be advised that s/he may seek a review of the decision by a person of higher rank in CDS.


Last modified:01/07/2010
 

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