Government gives to self-employed with one hand and takes away from pensioners with the other - ICTU

29 Apr 2019

Responding to the announcement of the introduction of a new social welfare payment Jobseeker’s Benefit (Self-Employed), Irish Congress of Trade Unions policy officer Dr Laura Bambrick said: “Self-employed workers have long had a right to claim the means-tested Jobseeker’s Allowance once they prove they are unemployed and have no other source of income. This is not changing, nor would Congress want it to change.

“What this new payment will do is to allow the self-employed for the first time claim a jobseeker’s welfare payment based on their PRSI contributions, which is to be commended.

“But, Congress takes issue that this is being done without requiring the self-employed to make a higher social insurance contribution to insure themselves against unemployment.”

Self-employed workers pay a 4 per cent rate of social insurance, compared to a 14.95 per cent contribution for employees.

Dr Bambrick added: “Historically, the self-employed did not have access to the full range of social welfare payments which was the justification for their smaller PRSI contribution. But, this is no longer the case.

“Even before this new payment comes into effect, the self-employed now have access to 80 per cent in value terms of contributory benefits while contributing a mere 27 per cent of the effective rate of social insurance paid in respect to PAYE workers.

“In a survey of 20,000 self-employed workers conducted by the Department of Employment Affairs and Social Protection ahead of the announcement of this new scheme in Budget 2019, over 4 in 5 of all respondents (88 per cent) said that they would be willing to pay a higher social insurance contribution in return for additional benefits.

“Officials estimate a 0.5 per cent increase in the self-employed 4 per cent PRSI rate would yield €77.5 million per annum.

“This was ignored by Government and instead this new payment is being introduced for the self-employed without a corresponding increase in their social insurance contribution rate.

“That this is happening at the same time when Government is introducing new measures which will make it more difficult to qualify for the full-rate old age pension and increasing the pension qualifying age to 68 out of their fears for the future sustainability of the Social Insurance Fund crystallises the unfairness and short-sightedness of Government thinking.