PRSI - PRSI Special Collection System


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GUIDELINES USED BY SPECIAL COLLECTION/POSTINGS SECTION IN WATERFORD

1. DOMESTIC EMPLOYER SCHEME

2. VOLUNTEER DEVELOPMENT WORKER

3. SCHEME OF POSTED WORKERS

4. PERSONS EMPLOYED IN TWO OR MORE EEA STATES

5. SPECIAL COLLECTION SYSTEM

6. BI LATERAL AGREEMENTS


Table of Contents

1. DOMESTIC EMPLOYER SCHEME
(1) Definition
(2) Administration and Registration
(3) Staff Guidelines
(4) Rates
(5) Registration

2. VOLUNTEER DEVELOPMENT WORKER
(1) Definition
(2) Administration
(3) Volunteer Development Workers
(4) PRSI Contributions and Credits
(5) Qualifying Conditions
(6) Staff Guidelines

3. SCHEME OF POSTED WORKERS E101
(1) Definition
(2) Administration
(3) Procedure for application
(4) Qualifying Conditions
European Union
European Free Trade Area

4. PERSONS EMPLOYED IN TWO OR MORE MEMBER STATES
(1) Definition
(2) Administration
(3) Procedure for application
European Union
European Free Trade Area

5. SPECIAL COLLECTION SYSTEM
(1) Definition
(2) Administration
(3) PRSI Payments and End of Year Returns
(4) Exemption from payment of PRSI

6. BI LATERAL/RECIPROCAL AGREEMENTS
(1) Definition
(2) Administration
(3) Procedure for application
(4) Qualifying Conditions
(5) Other Postings


1. DOMESTIC EMPLOYER SCHEME

(1) Definition

The Domestic Employer Scheme removes the obligation on certain employers to operate under the PAYE system, with effect from 6 June 1997. The scheme applies to individual domestic employers who employ one domestic employee for less than €40.00 wages per week. Companies, clubs, organisations etc. are not covered by the Scheme.

PRSI is paid directly to the Department of Social Protection in a single annual payment at the end of each tax year.

(2) Administration and Registration

The Domestic Employer Scheme is administered by:

Special Collection Section
Social Welfare Services Office
Department of Social Protection
Cork Road
Waterford

Telephone: 1890 690 690

Information on this scheme together with a Registration Form is available on leaflet "Domestic Employer Scheme", IT 53.

(3) Guidelines

An employer can qualify for this scheme if:

  • s/he is an individual (companies, clubs, organisations etc. do not qualify)
  • s/he has only one domestic employee who is employed solely on domestic duties in his/her home - this includes child minding.
  • s/he pays less than €40.00 a week to the employee.

(4) Rates

Employers who qualify under the scheme will pay PRSI at a rate of either 0.5% of gross pay (Class J) to Department of Social Protection. This contribution covers Occupational Injuries Benefit only. OR

8.5% of gross pay (class A0) to Revenue where the weekly earnings is €40.00 or more. This contribution covers all Social Welfare benefits and pensions.

No contribution is payable by the employee where the earnings are less than €352.00 per week in 2008. Where weekly earnings exceed this amount a PRSI free allowance of €127.00 per week applies.

(5) Registration

A domestic employer who wishes to register for this Scheme should complete the Registration Form IT 53, available from Special Collection Section or Revenue. PRSI liability for earnings less that €40.00 per week is paid directly to the Department of Social Protection in a single payment at the end of each income tax year.

If earnings are above €40.00 per week, the employer must register as an employer with Revenue and operate PAYE/PRSI in the normal way.

The pay to the domestic employee continues to be taxable and the employee must declare this income on income tax returns. If you need further information or clarification on any point, please contact your Regional Revenue Office, see attached link for current contact details: http://www.revenue.ie/en/contact/index.html

2. VOLUNTEER DEVELOPMENT WORKER

(1) Definition

Volunteer Development Workers (VDWs) who go abroad to work in developing countries are exempt from paying Social Insurance contributions while abroad. They are awarded credited contributions for the duration of their absence up to an aggregate of 5 years.

Special provisions also apply in respect of the easing of qualifying contribution conditions for the payment of Jobseeker's Benefit, Illness Benefit, Maternity Benefit, Treatment Benefit and Health and Safety Benefit. Details of the qualifying conditions applying to VDWs are included in the relevant Scheme guidelines.

Information Leaflet SW15 refers.

(2) Administration

The Volunteer Development Worker Scheme is administered by:

Special Collection Section
Social Welfare Services Office
Department of Social Protection
Cork Road
Waterford

Telephone: 1890 690 690

(3) Volunteer Development Workers

A person is classified as a Volunteer Development Worker (VDW) by this Department if they are working temporarily outside Ireland in a developing country and their work has been arranged through Irish Aid.

For Social Welfare purposes developing countries are usually African, Arabian, Asian, Latin-American, Caribbean or Pacific countries, which are described as low or middle income countries by the World Bank. The Minister for Social Protection in conjunction with Department of Foreign Affairs may designate any country as developing having regard to criteria laid down by international organisations.

For Social Welfare purposes, Comhlámh, on behalf of Irish Aid, validates the bona fides of the sending Organisation.

(4) PRSI Contributions and Credits

VDWs are exempt from paying Social Insurance contributions while abroad in developing countries. They are awarded credited contributions for the duration of their absence up to an aggregate of 5 years, provided the VDW meets the qualifying conditions of this scheme before the overseas assignment.

This will operate in one of two ways:

  • Persons who have 104 Class A contributions before departure will receive special credited contributions for overseas service. These contributions will maintain their PRSI contribution record while working overseas.
  • If a person has less than 104 Class A contributions, Comhlámh, on behalf of Irish Aid, will pay Class A contributions on his/her behalf until s/he has 104 Class A contributions paid. After the 104 Class A contributions are paid the VDW will then receive special credited contributions for the remainder of his/her overseas service.
  • Where there are two consecutive Tax Years where a person has no contributions paid or credited immediately prior to going abroad as a Volunteer Development Worker, Comhlámh, on behalf of Irish Aid, will pay 26 Class A contributions for the first 26 weeks of the assignment and special credited contributions for the remainder of the VDW's overseas service.

(5) Qualifying Conditions

  • The VDW must be employed under conditions of pay which are similar to local conditions in the developing country.
  • The VDW must be over 16 years of age.
  • The VDW must be resident in Ireland prior to departure.
  • Work should be arranged through:
    • Comhlámh, on behalf of Irish Aid, or a non-governmental organisation in Ireland.
    • a governmental or non-governmental agency in any EU country.
    • directly with the Government of the developing country.

Note: Members of religious orders whose work involves pastoral duties do not qualify for this scheme.

3. SCHEME OF POSTED WORKERS

(1) Definition

Payment of social insurance is compulsory for all employed persons in the *European Economic Area (EEA). As a general rule, social insurance is payable in the country where the person works.

However, exceptions to this general rule are provided for under Council Regulations (EU) No 883/2004 and 987/2009. These Regulations provides that a person normally employed in one Member State, who is sent by his employer to another Member State, can continue to be subject to the Social Insurance provisions of the first Member State, provided that the anticipated duration of that work does not exceed 24 months. Such employees are often referred to as "posted" workers. This means that a posted worker remains covered under the social security scheme of the sending state and Portable Document A1 is issued.

Note: EFTA countries Iceland, Norway, Liechtenstein and Switzerland continue to operate under EU Regulation 1408/71 and 574/72 until the current agreement is amended to include these countries.

Third country nationals legally resident in the EU also continue to operate under EU Regulation 1408/71 and 574/72 until the current agreement is amended to include them.

Contributions shall still be paid to the social security scheme of the sending country and the employer should ensure that the worker remains insured against accidents at work and occupational diseases. The worker and the members of his/her family remain entitled to cash benefits in case of sickness or maternity, family benefits and benefits for accidents at work or occupational diseases from the sending country. The worker remains insured against unemployment under the scheme of the sending country.

(2) Administration

The Scheme is administered by:

Special Collection Section
Social Welfare Services Office
Department of Social Protection
Cork Road
Waterford

Telephone: 1890 690 690

(3) Procedure for application

An Irish employer wishing to send an employee to work in another Member State, while continuing to pay Irish social insurance, must firstly obtain Portable Document A1 from this Department. The Department has authority to issue A1 certificates where the period of overseas work does not exceed 24 months. An application form may be obtained from Special Collection Section at the address above, or downloaded at: 'www.welfare.ie/EN/Topics/PRSI/intposts/Pages/intindex.aspx'

If it is known from the outset that the overseas work is longer than 24 months the prior approval of the other Member State should be obtained, under Article 16 of EU Regulation 883/2004, before Portable Document A1 is issued.

When received, each application is examined to ensure that:

  • the employee is actually being posted from Ireland.
  • where the employee is engaged with a view to being posted, s/he must be subject to Irish Social Insurance legislation for a least one month immediately before posting.
  • a direct relationship exists between the employer and the employee during the period of posting.
  • the employee is not being posted to replace another posted worker whose period of posting has ended.
  • the employee is employed by the employer posting him/her
    or
    is being recruited for the specific reason of posting

When the Portable Document A1 is granted the employer and employee are informed of the following;

  • that the employee remains subject to Irish Social Insurance for the period of the posting and is therefore exempt from Social Insurance in the Member State where s/he has been posted.
  • the provisions of the posting cease to apply if the direct relationship between the posted worker and the employer which posted him/her is not maintained.
  • the Portable Document A1 must be available for inspection by the Social Security authorities in the Member State where the employee is employed.
  • this office should be notified of any change in the circumstances of a posting.

In certain circumstances it is possible to extend the posting period beyond 24 months. If the duration of the work to be done extends beyond the period originally anticipated, owing to unforeseen circumstances, the Social Insurance legislation of the first Member State can continue to apply provided the competent authority of the Member State in whose territory the employee is employed gives its consent.

(4) Qualifying Conditions

Portable Document A1s are available to:

  • employees of a company trading in Ireland who are sent by their employer to another Member State of the *European Economic Area (EEA) for a temporary period. Either the employee who is being posted abroad, or his/her employer, should complete an application form and declaration prior to commencing overseas employment.
  • persons who are normally self-employed in Ireland who obtain temporary self employment in another Member State of the EEA. There is a separate application form for the self-employed who are required to show that they normally trade in Ireland on a self employed basis for at least two months immediately before posting. On returning to Ireland a self-employed person must make an income tax return under the self assessment scheme and pay any PRSI due to the Revenue Commissioners - please see separate guideline on PRSI for the Self-Employed.

* The following countries form the European Economic Area:

Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom.

Iceland, Norway, Liechtenstein

Switzerland

4. PERSONS NORMALLY WORKING IN TWO OR MORE EEA STATES

(1) Definition

Payment of social insurance is compulsory for all employed persons in the *EEA countries. As a general rule persons subject to EU Regulation 884/04 shall be subject to the legislation of a single Member State only. Special rules apply to persons normally employed in the territory of two or more Member States;

(i) The legislation of the Member State of residence if he works for one employer in different Member States and pursues a substantial part of his activity in the Member State of residence;

(ii) The legislation of the Member State of residence is he is employed by various undertakings or various employers whose registered offices or places of business are in different Member States;

These rules are similar in nature to those contained in Article 14 of Regulation 1408/71 but are simplified. In particular, the revised rules remove the special provisions in Regulation 1408/71 relating to travelling or flying personnel and introduce the concept of ‘substantial activity’.

A person who ‘normally pursues an activity as an employed person in two or more Member States’ is a person who;

(a) While maintaining an activity in one Member State, simultaneously exercises a separate activity in one or more other Member States, irrespective of the duration or nature of that separate activity;

(b) Continuously pursues alternating activities, with the exception of marginal activities, in two or more Member States, irrespective of the frequency or regularity of the alternation.

Substantial activity’ pursued in a Member State means that a quantitatively substantial part of all the activities of the worker is pursued there, without this necessarily being the major part of those activities. 25% is an indicator that a substantial part of all the activities of the worker is pursued in that Member State.

(2) Administration

The Scheme is administered by:

Special Collection Section
Social Welfare Services Office
Department of Social Protection
Cork Road
Waterford

Telephone: 1890 690 690

(3) Procedure for application

An application for Portable Document A1 must be made to the institutions in the employee’s country of residence.

The institution in the Member State of residence must decide which Member State’s legislation should apply. This decision is made initially be on a provisional basis and the institution in the country of residence must inform each Member State where an activity is preformed and where the employer’s registered office is located. If the decision is not contested by any Member State within two months the provisional decision becomes definitive and Portable Document A1 is issued.

* The following countries form the European Economic Area;

Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom.

Iceland, Norway, Liechtenstein

Switzerland

5. SPECIAL COLLECTION SYSTEM

(1) Definition

PRSI contributions for employed people who are insurable under Irish social security legislation and who do not come within the PAYE system are collected through the Special Collection Section of the Department of Social Protection.

The primary Regulations dealing with the Special Collection System are the Social Welfare (Consolidated Contributions and Insurability) Regulations, 1996 (SI 312/1996).

The Special Collection system includes the following types of employees:

  • whose earnings are paid from an employer’s office outside the State but are not obliged to register with Revenue.
  • who continue to be insured under Irish social security legislation while they are temporarily posted to another country and are paid by a foreign payroll.
  • persons who are self-assessed for income tax purposes but classified as employees for PRSI purposes - e.g. Sub Post Masters, Social Welfare Branch Managers, medical professionals employed on a fee basis by the various Health Service Executive areas.
  • Church of Ireland Ministers employed by the Representative Church Body (Class E PRSI).
  • Locally hired employees of Embassies.

(2) Administration

The Special Collection System is administered by:

Special Collection Section
Social Welfare Services Office
Department of Social Protection
Cork Road
Waterford

Telephone: 1890 690 690

(3) PRSI Payments and End of Year Returns

Payments of PRSI should be made to:

The Accountant
Department of Social Protection
Government Buildings
St Alphonsus Road
Dundalk
Co Louth

End of Year Returns in respect of PRSI liabilities are made to the Department of Social Protection on form SC1(b) - equivalent to P35 - at the end of each income tax year.

Each employee should also receive each year a completed form SC4 (equivalent to P60) certifying total earnings and his/her share of PRSI contributions paid. Where an employee ceases employment during an income tax year a cessation of employment certificate SC3 (equivalent to P45) should be issued.

These forms are available from Special Collection Section at the address above, or download from 'www.welfare.ie/EN/Topics/PRSI/Pages/specindex.aspx'

(4) Exemption from payment of PRSI

Exemption from liability to pay employment contributions may be granted, for a period not exceeding 52 weeks, in respect of the temporary employment of a person who is not ordinarily resident in the State and whose employer is not ordinarily resident in the State, or has not his/her principal place of business in any EEA State or a country with which Ireland has concluded a Bilateral/Reciprocal Agreement.

Details can be obtained from;

Special Collection Section
Social Welfare Services Office
Department of Social Protection
Cork Road
Waterford

Telephone: 1890 690 690

6. POSTINGS UNDER BILATERAL/RECIPROCAL AGREEMENTS

1) Definition

2) Administration

3) Procedure for Application

4) Qualifying Conditions

(1) Definition

Ireland has bilateral/reciprocal agreements on Social Security with a number of other countries. These countries are: Australia, Canada, Japan, New Zealand, Republic of Korea, Quebec, the United Kingdom (Isle of Man, Jersey, Guernsey, Alderney, Herm and Jethou) and the United States of America.

Employees sent (posted) from Ireland by their Irish employer to these other States to work for a temporary period are compulsory insured under Irish Social Insurance legislation for the periods set out below. During this period of retention under Irish social insurance legislation, PRSI contributions are payable in Ireland, social insurance is not payable in the other State.

Australia
4 years
Canada
2 years
Japan
5 years
New Zealand
2 years
Republic of Korea
5 years
Québec
2 years
United Kingdom
3 years
United States of America
5 years

These periods can, in certain circumstances, be extended.

(2) Administration

The schemes of posting under the Bilateral/Reciprocal Agreements are administered by:

Special Collection Section
Social Welfare Services Office
Department of Social Protection
Cork Road
Waterford

Telephone: 1890 690 690

(3) Procedure for application

An Irish employer wishing to post a staff member overseas should obtain an application form from: 'www.welfare.ie/EN/Topics/PRSI/intposts/Pages/intindex.aspx'

(4) Qualifying Conditions

The qualifying conditions for postings under the various Bilateral Agreements are broadly similar. The principal condition is that the posted person is subject to Irish Social Insurance legislation prior to posting.

Special Provisions Relating to the United Kingdom (Isle of Man and Channel Islands)

The provisions of EU Regulation 883/2004 apply to persons being posted from Ireland to the UK. It should be noted, however, that the Regulation does not apply to the Isle of Man, Jersey, Guernsey, Alderney, Herm and Jethou. The posting provisions of the Ireland-UK Reciprocal Agreement apply to persons being posted to these islands.

OTHER POSTINGS (COVERED BY IRISH SOCIAL INSURANCE LEGISLATION)

1) Definition
2) Administration
3) Procedure for Application
4) Qualifying Conditions

(1) Definition

There are also, under Article 98 (1) & (2), of SI 312/96 provisions for retaining a person, sent by an Irish employer to work temporarily in another country, on Irish social insurance (PRSI) for the period of the overseas posting. This Article refers to postings outside the States of the European Economic Area, outside the countries with which Ireland has Bilateral Agreements and outside the islands included in the Ireland/UK Reciprocal Agreement.

Employees shall be retained on the Irish social insurance system for the first 52 weeks of a posting by way of application to Special Collections. This period may be extended beyond the 52 week period by request to the Department of Social Protection.

Unlike the posting provisions of EU Regulation 883/2004 and the Bilateral Agreements, retention under the Irish PRSI system by virtue of Article 98 of SI 312/96, does not exempt the employee from paying social insurance contributions in the other country.

(2) Administration

The provisions of Article 98 of SI 312/96 are administered by:

Special Collection Section
Social Welfare Services Office
Department of Social Protection
Cork Road
Waterford

Telephone: 1890 690 690

(3) Procedure for Application

An Irish employer wishing to post an employee overseas should obtain an application form from Special Collection Section at the address above, or download from: 'www.welfare.ie/EN/Topics/PRSI/intposts/Pages/intindex.aspx'

(4) Qualifying Conditions

The three main conditions are that:

  • the insured person is normally resident in Ireland
  • the employer is resident or has a place of business in Ireland
  • the posting is of a temporary nature
Last modified:05/05/2011
 

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