Social insurance fund €377m in surplus, says Varadkar

Minister cuts contribution young people on welfare make to rent supplement

Minister for Social Protection Leo Varadkar: said he intended to keep the social insurance fund in surplus. Photograph: Alan Betson

Minister for Social Protection Leo Varadkar: said he intended to keep the social insurance fund in surplus. Photograph: Alan Betson

 

The social insurance fund will have a surplus of €377 million this year, the first time it has been in surplus since 2007, Minister for Social Protection Leo Varadkar has said.

The fund, which is made up of PRSI contributions from employers, employees and the self-employed, had a deficit of €2.75 billion in 2010.

Mr Varadkar said the surplus reflected the recovering economy, with fewer people unemployed and incomes rising again.

He said he intended to keep the fund in surplus. “This is important,’’ he added. “We need to prepare for an ageing population and the rising pension costs that come with it.’’

Mr Varadkar said although the economic prognosis for Ireland remained good, some headroom was required in the event of future economic uncertainty.

He said he planned to extend social insurance benefits in the coming years in an affordable, prudent and sustainable way.

Rent supplement

Meanwhile, Mr Varadkar has cut the personal contribution young people on welfare make to their rent supplement.

He said it represented a saving of up to €20 a week, or €80 a month, for anyone under 26 years receiving the supplement and claiming jobseeker’s or supplementary welfare allowances.

“This measure will help to ease the rental burden on young people on welfare,’’ said Mr Varadkar.

“Under the previous arrangement, a very significant portion of their income was going on rent.’’

He said the measure had been sought by organisations working with homeless people.

“It is expected to help young people to transition from homeless services and into rented accommodation,’’ he added.

Mr Varadkar said his department had set aside €500,000 annually to cover the cost.