Friday 6 December 2019

Self-employed 'should pay more for better benefits'

Charlie Weston Personal Finance Editor

SELF-employed people should pay more social insurance in order to be able to access unemployment payments, according to a report by the Citizens Information Board.

This is because they find it impossible to get access to social welfare payments when their business collapses or they have no work, the report said.

It comes as a shock to those who worked for themselves when they discover that they are not entitled to jobseeker's benefit or illness benefit when their income collapses. Many of those who were sole traders now have no income but are heavily indebted.

Jobseeker's benefit is paid at a rate of up to €188 a week for a year, but only to employees who lose their jobs -- and not to the self-employed who see their income dry up.

The report, entitled 'Hard Times For The Self-Employed', recommends an overhaul of the Pay Related Social Insurance (PRSI) system, which would see the self-employed paying more, but in turn being entitled to the likes of jobseeker's benefit.

Money Advice and Budgeting Services (MABS) offices have found that those who work for themselves find it "difficult to access social welfare supports to meet basic living expenses for themselves and their families".

Part of the reason for this is difficulty in providing updated company accounts, which show their most recent earnings.

This means that it is hard for the self-employed to get jobseeker's allowance, which is provided to those in dire financial straits but is means tested.

Mark Fielding, chief executive of the business lobby group ISME, said the self-employed were being discriminated against in the area of social welfare.

"The self-employed are entitled to absolutely nothing," he said. But Mr Fielding also acknowledged that the self-employed pay social insurance at a rate of 4pc on all income.

Employees pay at 4pc on income up to €75,000, but their employers pay 10.75pc of their salary on top of this.

The self-employed are only entitled to a pension, widow's pension and maternity benefit. Employees, however, have a larger range of benefits, including jobseeker's benefit, illness benefit, training schemes and medical cards.

Irish Independent

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