Tuesday 27 September 2016

'PRSI now more about tax than benefits'

Published 07/09/2016 | 02:30

Deputy chairman of the CAI Michael Kilcoyne. Fennell Photography
Deputy chairman of the CAI Michael Kilcoyne. Fennell Photography

Changes to PRSI have seen it go from being a fund to pay for benefits to workers to being just another tax, it has been claimed.

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Adjustments to pay-related social insurance rates (PRSI) and how it is applied in a sequence of budgets since 2009 have seen the amount paid by middle-income workers rise.

At the same time, the benefits paid out of the fund have been pared back.

The Consumers Association of Ireland (CAI) claimed the PRSI system has changed from being a means to pay for benefits to workers, to being just another tax during the austerity years.

PRSI funds the Department of Social Protection's social insurance fund, and is used to pay the State pensions, unemployment benefit, maternity and paternity benefits and redundancy payments.

A worker earning €55,000 a year is now paying €400 more in PRSI today compared with the amount paid before the crash, according to calculations by the Irish Tax Institute.

Since 2008, there has been a reduction in the dental and optical benefits, jobseeker's benefit is paid for a shorter period for those who lose their job, there are restrictions on illness benefit, and the State pension age has gone to 66.

Deputy chairman of the CAI Michael Kilcoyne, pictured, claimed social insurance has been largely dismantled for middle-income workers.

Mr Kilcoyne said: "Steadily, we have seen the benefits being taken away or reduced and the amount collected going up.

"It has changed from being a social protection fund to being just another tax."

The overall yield from PRSI has jumped 18pc to an estimated €8.9bn this year, according to the State's Tax Strategy Group.

The social insurance fund is estimated to a surplus of €217m this year. This is in sharp contrast to previous large deficits.

Irish Independent

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