Friday 30 September 2016

Varadkar planning to extend welfare benefits

Published 09/06/2016 | 02:30

Leo Varadkar warned that a pension crisis might occur in the future
Leo Varadkar warned that a pension crisis might occur in the future

Self-employed business people are to be given some additional social welfare benefits.

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All workers who pay PRSI will also get back dental and eye tests, which were removed during the recession.

However, Social Welfare Minister Leo Varadkar also starkly warns: "A pension crisis is looming." As a result, he is looking at a new tax-efficient pension fund for workers.

Writing in today's Irish Independent, Mr Varadkar sets out his priorities in his new role.

He is moving towards providing a safety net to the 330,000 self-employed people in the country. However, he is not yet committing to giving them the dole.

Self-employed people don't get the same benefits from PRSI as employees.

Mr Varadkar is going to give them a "stronger safety net" if they have to give up work due to invalidity, care for a relative, or their business fails.

The last government began to narrow the gap in tax payments between the self-employed and PAYE workers.

The earned income tax credit, which currently only applies to PAYE workers, will be extended to the self-employed in future Budgets.

Self-employed people do get some benefits at the moment, including the State contributory pension without any means test when they retire.

They also qualify for Widow's, Widower's or Surviving Civil Partner's Pension (Contributory), Guardians Payment (Contributory), Maternity Benefit and Adoptive Benefit.

But they don't get Carer's Benefit if they need to give up their job to look after a sick relative, or any of the long-term illness benefits if they have to give up work because they become injured or ill.

And they also don't get treatment benefits such as dental, optical and hearing aids.

The self-employed also don't get the dole or Jobseekers Benefit. The minister is understood to believe this is complicated because it's hard to determine when precisely a self-employed person becomes unemployed.

The minister now plans to develop a new PRSI scheme for the self-employed by extending many more benefits to them.

Another issue is that self-employed people do pay PRSI at a rate of 4pc like most employees. But they don't pay the 10pc employers pay. So a self-employed person is both an employee and an employer.

The minister plans to bring his proposals to Cabinet for approval before the summer break outlining the various options.

He will also consult with self-employed workers to see what benefits they would like.

And he will also ask whether or not they would be willing to contribute more to the fund, either on a compulsory or voluntary basis, in return for additional benefits.

Meanwhile, Mr Varadkar also says he will extend social welfare benefits for workers.

Paternity benefit will be introduced from September and he is also looking at restoring some dental, optical and other health benefits and "enhanced financial support" for people who become unemployed after years of paying into the system.

Irish Independent

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