Third Report: Extending Social Insurance Coverage for the Self-Employed

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1.1 Overview

The Advisory Group on Tax and Social Welfare was established by the Minister for Employment Affairs and Social Protection in June 2011. The Group’s terms of reference are wide ranging and are set out in full in Appendix 1. This report is concerned with the issues involved in providing for the extension of social insurance cover for self-employed people in order to establish whether or not such cover is technically feasible and financially sustainable. It sets out the Group’s findings and recommendations in this regard. It should be borne in mind that the Group is required to consider any proposals for change to existing arrangements in a cost-neutral or cost-reducing context.

The issue of whether the present arrangements regarding social insurance for the self-employed are appropriate has increased in prominence over recent years. The economic recession and the consequent rise in the unemployment rate have highlighted the fact that many workers, particularly in the construction sector, had been operating on a self-employed basis and had been making PRSI Class S contributions. As a result these workers have no entitlement to the insurance based Jobseeker’s Benefit. They also do not have an entitlement to a range of benefits which are available to employees contributing at the PRSI Class A rate including Invalidity Pension and Occupational Injuries Benefits. The Group considered the question of social insurance entitlement in the context of the particular issues that can arise for the self-employed in securing access to means tested welfare supports. The experiences of self-employed persons in relation to these issues have been outlined in a recent Citizen’s Information Board report. Its findings have been drawn on in the work of the Advisory Group on this module.

This report commences with a review of the historical and current arrangements for the self-employed in the tax and social welfare systems (Chapter 2). It then considers whether extending social insurance for the self-employed to cover short-and long-term contingencies in relation to unemployment or ill-health is, first technically feasible (Chapter 3) and second, financially achievable (Chapter 4). Finally, Chapter 5 sets out the Recommendations of the Group.

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Last modified:06/09/2013