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Social insurance in Ireland

Introduction

Most employers and employees (over 16 years of age and under 66) pay social insurance contributions into the national Social Insurance Fund (SIF). In general, the payment of social insurance is compulsory.

The Social Insurance Fund is made up of a current account and an investment account managed by the Minister for Social Protection and the Minister for Finance, respectively. The current account consists of monies collected from people in employment. This money is then used to fund social insurance payments. The investment account is a savings account that is managed by the Minister for Finance. The Comptroller and Auditor General is responsible for ensuring that the accounts are kept in order and reports are made to the Houses of the Oireachtas.

Changes in 2014

In 2013 people paying modified rate contributions (mainly civil and public servants recruited before April 1995) became liable to PRSI of 4% (paid at Class K) on earned self-employed income and any unearned income (from 1 January 2013) and on self-employed income which comes under PAYE (from 28 June 2013).

In 2014 unearned income for everyone else will become liable for PRSI. Unearned income from rents, investments, dividends and interest on deposits and savings will be liable to PRSI at 4% from 1 January 2014. People under 16 and over 66 remain exempt from PRSI and are not liable for the new charge.

PAYE tax payers who are not considered 'chargeable persons' by Revenue are not liable for the new PRSI charge. A person is not a 'chargeable person' if their income from non-PAYE sources is less than €3,174 and this income is taxed under the PAYE system. (Generally such income is taxed by reducing a person’s tax credits to account for tax payable. If you have paid Deposit Interest Retention Tax (DIRT) on your non-PAYE income you are not required to pay further income tax on this income.)

Anyone with unearned income of over €3,174 is considered to be a 'chargeable person' and is liable for the new 4% PRSI charge. They will pay the charge under Revenue's self-assessment system (Pay and File). The new PRSI charge is paid at Class K and does not entitle the person to any social insurance benefits.

The Department of Social Protection has published Information on the Extension of PRSI liability to unearned income.

You can also read FAQs on the broadening of the income tax base for PRSI.

Work and social insurance

If you are in employment, the amount of social insurance you pay depends on your earnings and the type of work you do. Your social insurance contributions in Ireland are referred to as PRSI (Pay Related Social Insurance). Sometimes, you will hear people describe their PRSI contributions as stamps. This term dated from before 1979 when employers would literally stamp a card each week of employment. That card was then brought to a Social Welfare Local Office in order to claim social welfare payments.

If you are an employee, your social insurance contributions are deducted by your employer and collected by the Revenue Commissioners. In fact, the law makes your employer responsible for PRSI, though you may have to pay an 'employee's share'. Find out more about your employer's duty to pay social insurance.

If you are self-employed, you pay Class S social insurance contributions directly to the Revenue Commissioners. The Revenue Commissioners then pay the money into the Social Insurance Fund. Revenue send a record of the contributions you have paid to the Department of Social Protection.

You are not liable for PRSI contributions after the age of 66 - this is the case whether or not you are employed or self-employed. If you do not have enough contributions at age 66, you cannot add to them after that.

Social insurance rates

For people in employment in Ireland, social insurance contributions are divided into different categories, known as classes or rates of contribution. The type of class and rate of contribution you pay is determined by the nature of your work. For example, a person employed in a supermarket earning less then €38 per week will be insured under Class J. If that person earned over €38, they would probably be insured under Class A. In fact, most employees in Ireland pay Class A PRSI. This class of contribution can entitle you to the full range of social insurance payments that are available from the Department of Social Protection, if you meet the qualifying criteria.

The other classes of social insurance are Classes C, D, B, E, H, J, S, K, M, and P. If you are insured under one of these classes, you are paying insurance at a lower rate than Class A contributors, which means that you are not entitled to the full range of social insurance payments. This is because you are paying less towards social insurance than a Class A contributor.

The amount of PRSI you pay will depend on your earnings and the class you are insured under. Find out more about the different social insurance classes and how much social insurance you will pay.

Maintaining your social insurance

It is important that you maintain, as far as possible, your social insurance record. If you leave the workforce, it is important that you keep your social insurance record active. To protect your social insurance record and keep it active, you should contact the Department of Social Protection to check if you can get credited contributions. It may be possible in certain circumstances for you to make voluntary contributions. You can also add Irish contributions and contributions paid in certain other states while working abroad together qualify for a social insurance payment.

If you are a part-time worker or in a job-sharing work arrangement you should be aware of how your pattern of work can affect your social insurance record. This is particularly relevant if you are part-time or job-sharing with a week off as part of your work pattern because you may miss out paying a PRSI contribution for the week you are not working. Find out more about part-time and job-share workers and social insurance contributions.

All records of your insurance contributions are kept and managed by the PRSI Records section in the Department of Social Protection. The Department is responsible for the payments made as a result of your social insurance contributions.

You can request a copy of your social insurance record online. To check your social insurance record, you will need your Personal Public Service Number (PPSN). This number is a unique identification number which you need when dealing with state agencies.

Social insurance payments and benefits

A wide range of benefits are available to people who have paid social insurance. Entitlement to these benefits is dependent on a number of conditions other than the social insurance contribution requirement. The social insurance qualifying criteria vary, depending on what payment you are applying for. In general, when you apply for a social insurance payment the following will be examined:

  • What class/classes of social insurance you have paid
  • Your age when you started making social insurance contributions (this applies in the case of State Pensions)
  • How many paid and/or credited contributions you have made since entering insurable employment
  • The number of contributions paid and/or credited in the relevant tax year before the benefit year in which you make the claim. The relevant tax year is the second last complete tax year before you make a claim.
  • The yearly average number contributions in the case of some pensions

The social insurance payments available include:

Where to apply

PRSI Records

Department of Social Protection
McCarter's Road
Ardaravan
Buncrana
Donegal
Ireland

Tel:(01) 471 5898
Locall:1890 690 690
Homepage: http://www.welfare.ie/

PRSI Refund Section

Department of Social Protection
Oisin House
Pearse Street
Dublin 2
Ireland

Tel:(01) 673 2586

Page updated: 18 October 2013

Language

Gaeilge

Related Documents

  • Social insurance classes
    The social welfare benefits you can get is determined by the PRSI Class you are in. This document helps you find out your class of social insurance and the weekly amount of social insurance you must pay.
  • Employer's duty to pay social insurance (PRSI)
    Paying PRSI can entitle you to certain social welfare benefits. The law makes your employer responsible for PRSI. This document explains your employer's duty to pay PRSI.
  • Voluntary social insurance contributions
    Voluntary social insurance contributions can help you qualify for a social insurance payment in the future. Find out more about making voluntary contributions.

Contact Us

If you have a question relating to this topic you can contact the Citizens Information Phone Service on 0761 07 4000 (Monday to Friday, 9am to 8pm) or you can visit your local Citizens Information Centre.