Higher PRSI for top earners proposed in Government report
A Government report said that increasing the employee rate of PRSI from 4 to 5 per cent for higher earners would affect 250,000 employees and yield €60 million.
An unpublished Government report is proposing a higher rate of PRSI for those earning more than €75,000. The Department of Finance, proposes to fund gaps in the social insurance fund. This funding pays the majority of the employee’s social security costs.
According to the report increasing the employee rate of PRSI from 4 to 5 per cent for employees with higher incomes, would affect 250,000 employees and succumb €60 million euro.
The proposals include:
A PRSI increase of 1 per cent for both employers and employees.
An increase in earnings so that employees can benefit from social insurance.
Lowering the threshold at which employees begin to pay PRSI.
Government Ministers looked at these proposals before the last budget, but none of the measures were put in place.
The report’s proposals said the deficit for the social insurance fund has lessened in recent years, due to an increase in PRSI contributions, and benefits been reduced.
This is why the policy-makers did not need to follow through on any of the proposals.
The growing cost of pensions, increased by more than €190 million in 2013.
This indicated that funding pressures are probably going to continue.
Social insurance in Ireland occurs when weekly earnings surpass €38. The comparable threshold in the UK is €138. The report states that the threshold may have an increase of €100 a week.
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