Dáil Éireann - Volume 446 - 02 November, 1994

Written Answers. - PRSI Contributions.

93. Mr. M. McDowell asked the Minister for Social Welfare the estimated full year cost to the Exchequer in 1994 to 1995 of the reduction in employee and employers PRSI for those earning less that £9,000; the total number of employees involved; and the average cost to the Exchequer in respect of each such employee. [2563/94]

94. Mr. M. McDowell asked the Minister for Social Welfare the estimated [1519] cost to the Exchequer of a reduction of 1 per cent in employee PRSI. [2568/94]

95. Mr. M. McDowell asked the Minister for Social Welfare the estimated cost to the Exchequer of a reduction of 1 per cent in employer PRSI. [2569/94]

96. Mr. M. McDowell asked the Minister for Social Welfare the full year yield to the Exchequer in the year 1994 to 1995 of employee PRSI by way of social insurance, health contribution and youth employment levy. [2570/94]

97. Mr. M. McDowell asked the Minister for Social Welfare the rate of PRSI that would yield the same amount as existing employee PRSI rates if all employees in all payment classes paid the same rate. [2571/94]

98. Mr. M. McDowell asked the Minister for Social Welfare the extra full year yield to the Exchequer in the year 1994 to 1995 of requiring all employees to pay PRSI at the rate of 5.5 per cent and 1.25 per cent health levy and 1 per cent youth employment levy while maintaining the reduced rate for employees earning less that £9,000. [2572/94]

Minister for Social Welfare (Dr. Woods): It is proposed to take Questions Nos. 93 to 98 inclusive, together.

As part of a package aimed at creating and maintaining employment, a series of reforms in the PRSI system were introduced in this year's budget, including (i) a two-tier employers' PRSI contribution structure, with a new lower rate of 9 per cent applying in respect of employees earning less that £173 per week, (ii) exemption from paying the health contribution and youth training levy for employees, self-employed and occupational pensioners earning less than £173 per week.

The combined cost of these concessions estimated at budget time, was £89 million in a full year. This cost also included the cost of exempting. [1520] employers from paying levies in respect of those employees who are holders of medical cards. In order to partly offset the cost of the reduction in employers' PRSI, the ceiling on the employers' PRSI contribution was raised to £25,800.

It was estimated that up to 400,000 employees and occupational pensioners and 60,000 self-employed will benefit from one or more elements of this package.

The current estimated full year yield to the Exchequer in 1994-95 terms from employee PRSI, health contribution levy and youth employment levy is £760 million.

The estimated cost to the Exchequer of a 1 per cent reduction in Class A employees' PRSI is £89 million and the estimated cost of a 1 per cent reduction in Class A employer's PRSI is £96 million in 1995-96 terms.

It is estimated, in 1995-96 terms, that a uniform rate of 4.3 per cent employees' PRSI would have to be applied to all employees in all payment classes in order to achieve the current estimated employee PRSI yield. If a uniform rate of 5.5 per cent was applied to all employees it is estimated that the additional full year yield to the Exchequer would be in the region of £150 million.