New Social Payment

A GROUP assessing the impact of the proposed universal social contribution (USC), to replace employee PRSI, and the health and income levies will report to Minister for Finance Brian Lenihan within weeks.

A new universal social contribution will replace employee PRSI, the health levy and the income levy. It will be paid by everyone at a low rate on a wide base as a collective contribution to public services.

Finance Minister, Mr Lenihan announced his intention to introduce the charge on income in his budget speech last December.

What is PRSI & what is it used for?

The PRSI contribution is made up of Social Insurance and the Health Contribution (health levy), many workers were not aware of the health levy until the income levy was introduced in 2009. The Social Insurance element goes to the Social Insurance Fund ( SIF) which helps pay for Social Welfare benefits and pensions. This element is paid by employers and employees.

The Health Contribution goes to the Department of Health and Children to help fund the health services. The Health Contribution is included in the employee's share of the PRSI contribution. all employees, with very few exceptions whether full-time or part-time, pay PRSI.

Am i entitled to PRSI credits while unemployed?

'Credits' are automatically given for any period you get Jobseeker's Benefit. 'Credits' may also be given for periods of Jobseeker's Allowance or if you participate in an education or part-time work scheme for unemployed people.

If you are sick or unemployed, you may qualify for 'credits' even if you are not getting Illness Benefit or an unemployment payment. This can happen, for example, if you:

-do not have enough PRSI contributions to qualify for benefit;
-have used up your benefit, or
-are disqualified from getting unemployment payments because of a trade dispute.

If you are unemployed, you may be entitled to sign for 'credits' at your local Social Welfare Office.

What are Credited Contributions?

If you are an employee, Pay Related Social Insurance (PRSI) deductions are made from your earnings each week. Your PRSI contributions to the Social Insurance Fund can help you to qualify for social insurance payments, such as Jobseeker's Benefit and State Pension (Contributory).

A credited social insurance contribution is a contribution given to you without a PRSI payment. Some social welfare payments, including pension payments, allow you to combine your paid and credited contributions to help you qualify for a social insurance payment.

To qualify for a credit you must have worked and paid at least one PRSI contribution at PRSI Class A, B, C, D, E, or H and have paid or credited contributions in either of the last two completed tax years. For example, if you are applying for credits in 2009 you must have paid or credited contributions in either 2008 or 2007. If there is a gap of more than two completed tax years you must work and pay contributions for a further 26 weeks before you qualify for credited contributions.