From Department of Social Protection
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Seanad Éireann – 3rd July 2019
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I am delighted to present this Bill to Seanad Eireann today. It is a Bill which has one straightforward purpose - to give effect to the decision announced in Budget 2019 to provide for a new scheme of Jobseekers Benefit for the Self-Employed from November of this year.
This new scheme will provide a social insurance support to self-employed contributors who lose their businesses and will provide them with the support and breathing space they need as they re-assess their next steps.
This Bill is very much in keeping with this Government's policy of supporting self-employment and entrepreneurship.
The new benefit we are introducing reflects the Government’s aim of creating a supportive environment for entrepreneurship, including providing an income safety net to employees and self-employed alike. This Government has sought to encourage enterprise and, in particular, has sought to introduce a new deal for the self-employed when it comes to their access to benefits.
Senators will recall that we have already extended Treatment Benefits and Invalidity Pension to the self-employed in recent years to ensure that they reach some parity with employees in the benefits they can access from the social insurance system. The introduction of a new Jobseeker’s Benefit scheme for the self-employed represents the next step in the Government’s work to extend PRSI benefits and will provide an income safety net to thousands of small and medium businesses throughout the country. For the first time this gives the self-employed access to the safety-net of income supports if they lose their self-employment, without having to go through a means test.
Many of the features of the existing jobseeker’s benefit scheme, which provides support to employees who have lost their jobs, will apply to this new scheme. For example, the personal rate of payment of €203 per week will be the same for both schemes. The duration of payment, for six months or nine months depending on the claimant’s social insurance record, will also be the same. The scheme has been designed to take into account the fact that PRSI contributions by the self-employed are paid by way of an annual lump sum.
The activation of self-employed workers who have had to close their businesses, and their re-engagement into employment, whether that is again in self-employment or as an employee, will be a priority in my Department. We are currently examining the activation supports available for this group, but in any event, claimants of the new payment will have access to the full range of activation supports currently available to other jobseekers. This includes, for instance, referral to group information sessions, one to one interviews and subsequent caseworker support.
I should mention that self-employed people who are operating businesses at low levels of income can continue to access the means tested jobseekers allowance scheme. There are almost 7,000 self-employed in receipt of this payment at this time.
I would now like to briefly outline the content of the Bill, which contains 9 sections in 3 parts.
Part 1 (and Section 1) provides for the standard provisions setting out the short title of the Bill, its construction and citations, and commencement provisions.
Part 2 of the Bill deals with amendments to the Social Welfare Consolidation Act 2005.
Section 2 is again a standard provision which defines the Principal Act used in this Part of the Bill.
One of the consequences of introducing the new scheme is that it is necessary also to amend some of the provisions of the Act governing the existing Jobseeker’s Benefit scheme. These changes are provided for in Sections 3 and 4 of this Bill.
Section 3 extends the qualifying conditions for the existing Jobseeker’s Benefit scheme by providing that the first condition to determine eligibility for payment can now be met by having 104 employment or optional contributions (e.g. PRSI class “A” contributions) – as has always been the case - or by having have 156 self-employment contributions (PRSI class “S”). This positive change recognises that some people will have engaged in both employment and self-employment in the course of their working lives. By recognising that either form of employment gives rise to entitlements within the social insurance system, this change will help to ensure that an individual will not be at a disadvantage as a result of a move from employment to self-employment.
Section 4 provides that where a claimant who is in receipt of Jobseeker’s Benefit (self-employed) also satisfies the qualifying conditions for Jobseeker’s Benefit, periods spent in receipt of Jobseeker’s Benefit (self-employed) will be treated as though Jobseeker’s Benefit were being paid. This is a standard provision to ensure that a claimant does not secure a double benefit.
Section 5 is the key part of the Bill and provides for the introduction of a new Chapter 12A to the Principal Act which sets out all of the provisions governing the new Jobseeker’s Benefit (self-employed) scheme.
The new Chapter 12A provides for the general qualifying conditions for receipt of Jobseeker’s Benefit (self-employed), the social insurance contribution conditions, the rate of benefit payable (including reduced rate benefits payable where the average reckonable weekly earnings of the claimant fall below certain thresholds), the increases payable where there is a qualified adult or qualified children, the duration of payment, the requirement to engage with activation services and disqualifications. These provisions mirror, to a great extent, the existing provisions governing entitlement to Jobseeker’s Benefit. I do not propose to go through the detail of all of these aspects at this time, but we will, of course have an opportunity to look at these in greater depth when we are at Committee Stage.
Section 6 provides for a range of amendments to general provisions of the Act which cover all social insurance schemes and which are required to reflect the introduction of the new Jobseeker’s Benefit (self-employed) scheme. The amendments are set out in the form of a Schedule to the Bill.
Part 3 of the Bill provides for amendments to the Taxes Consolidation Act 1997 as a result of the introduction of the new scheme. Section 7 provides for the definition of the Taxes Consolidation Act 1997 used in this Part.
Sections 8 and 9 amend section 3 and 126, respectively, of the Taxes Consolidation Act 1997 to provide for and confirm the tax treatment of payments under the new Jobseeker’s Benefit (self-employed) scheme.
Jobseeker’s Benefit (self-employed) will provide an insurance-based safety net which has not, until now, been available to people setting up or running their own businesses. As Senators will know, the people we are talking about here are in very many cases engaged in small family-run businesses.
During the recession, everyone took a hit but I particularly remember how small businesses suffered. Almost overnight there were many fewer vans on the road and many office units shut down and left idle
Our economy is starting to hum again and I see more and more vans on the road and fewer empty office units. This is a great indicator of our national recovery. We talk a lot about bringing in large multi-national companies to Ireland but small businesses and tradespeople generate many of our jobs and are particularly important for jobs in rural areas.
By providing these job-creators with greater fairness and support, we can continue to build the best possible environment for growth and prosperity for all our citizens.
I should mention, before I conclude, that I hope to be in a position to introduce one small but important amendment to this Bill at Committee Stage. This relates to a separate matter from that covered in the Bill and concerns the procedures governing appeals in relation to social welfare payments which follow from decisions of deciding officers appointed as a bureau officer under section 8 of the Criminal Assets Bureau Act, 1996. In practical terms, the purpose of the amendment is to provide that such appeals will always have to be submitted to the Circuit Court. The amendment is currently being drafted and we will have the opportunity to deal with it in greater detail when we are at Committee Stage.
To conclude, I know I can expect valuable contributions from Senators in this debate and I am looking forward to your support during the passage of this important piece of legislation for what we are trying to achieve in supporting the self-employed.
ENDS