Jobseeker payment for self-employed on the cards

Fine Gael’s manifesto for the next general election is expected to commit the party to introducing a jobseeker’s benefit-type payment for self-employed people as part of a wider package of welfare reform measures.

The move would follow the party’s plan, announced last week, to complete tax equalisation for small business owners and entrepreneurs by 2018 if returned to government, bringing the self-employed into line with PAYE entitlements in the area.

However, a report prepared for Tánaiste and Minister for Social Protection Joan Burton, leader of the Labour Party, found a “perception” that the self-employed were not eligible for any social welfare support while out of work was not the case.

Taoiseach Enda Kenny established a Fine Gael “pro-business” working group at the beginning of the year, comprising backbench TDs Áine Collins, Tom Barry and Liam Twomey. The trio presented Minister for Finance Michael Noonan with a set of proposals they believed would benefit small business owners, after carrying out a survey of small and medium-sized enterprises (SMEs).

Major plank

They are hopeful the measures will form part of a major plank of the Fine Gael manifesto to be targeted at the self-employed.

“It would give out the right message that creating a business is valued, even if you fail,” Mr Barry said. “I think it will be in our manifesto and I’m fairly certain it will be implemented in time.”

Mr Twomey insisted there was no clash with Ms Burton over the issue. “I think between us we will reach a solution. We are trying to find common ground,” he said. “Obviously the self-employed person will have to pay a bit more and the State will have to pay a bit more. We’ll just have to find that balance.”

Ms Burton has said she is anxious to see the level of entitlement for self-employed people improve, but stressed any such change would need to be funded through an “appropriate” level of contribution.

Parliamentary question

Responding to a parliamentary question about the subject last June, Ms Burton said approximately 360,000 self-employed people, including business owners, contractors, taxi drivers and farmers, paid PRSI at the rate of 4 per cent.

A combined employer and employee PRSI rate of 14.75 per cent is paid in respect of most employees, who can access the full range of social insurance benefits.

In its 2013 report, the Advisory Group on Tax and Social Welfare found that almost nine out of every 10 self-employed people who claimed the means-tested jobseeker’s allowance during the three-year period from 2009 to 2011 received payment. The group was therefore not convinced that there was a need for the extension of social insurance for the self-employed to provide cover for jobseeker’s benefit.

However, the group found that extending social insurance for the self-employed was warranted in cases of long-term sickness or injuries, through the invalidity pension and the partial capacity benefit schemes.

The group was chaired by Ita Mangan, a barrister with experience in public policy.