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December 05, 2017

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Fact Checker

The problem is that almost no one has a clue what the Social Insurance Fund is and, if they do, they know that it is not really a fund, it is just an accounting presentation. The SIF did not stop paying out in 2011 when it was in massive deficit and the Exchequer was topping it up to the tune of billions!

If you want to give Ireland a proper pay-related welfare system (and I am sympathetic to the idea) you would need to really educate workers about the difference between social insurance and income tax.

I recently got hold of my PRSI contributions record. It was not obvious how to do so and, when I did, the record told me nothing about my entitlements.

As a minimum PRSI payers should be entitled to an annual, automatic statement of their contributions. This would helpfully tell them how much of a contributory state pension they are entitled to so far.

It would also tell them how much PRSI (employee and employer) they have paid in the current year. It is only then that you could really start with a proper entitlement-related system.

Michael Taft

Fact Checker - couldn't agree more. In many EU countries, the paycheque or equivalent breaks down the tax and social insurance, and further breaks the social insurance down into component parts: unemployment benefit, illness, pensions, etc. This allows people to not only see where there 'tax' or SI is going but makes the direct link between SI and the benefit. As part of building a strong social insurance state, education and information would be vital.

Fact Checker

You would also want a very strong legal framework around the SIF. What it can't be used for, what it can't, annual assessments of its solvency - not just the five-year assessment as at present.

It would need an independent head with some distance from the political system and informed reporting to the Oireachtas.

This is unlikely to ever happen of course. In the meantime it would be very nice if DEASP could do a better job of splitting up the presentation of means-tested and contributory programmes in their Vote. Currently they are just lumped together as 'welfare' in the public eye which is really not helpful.

There is a world of difference between a contributory pension paid after years of PRSI on the one hand, and universal cash transfer programmes like child benefit on the other.

Revenue could also advise people on how much PRSI they actually pay - I looked at my P21 recently and there is no reference to it at all - even though Revenue collect €8 billion of it every year from us!

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