# S class PRSI system another way of penalising entrepreneurs. (proprietary directors)



## ninak (1 Feb 2010)

Myself and my husband are both proprietory directors, so no avoiding S class PRSI. 

Seems to me that S class is just another way of making it harder to set up a business in this country. We don't have the same social welfare entitlements as A class. 

We are hoping to be in a position to take on staff later this year. It would seem that the staff we would employ would have way better social welfare entitlements than ourselves. 

For example, to qualify for maternity leave a woman paying A class would need to have 39 weeks of prsi paid from the previous tax year. For myself to qualify, I would need to have paid 52 weeks stamps. So as an employer, I am not allowed to take a holiday according to the department of Social Welfare, if I intend to have a baby any time soon.

I know we pay less PRSI under S class, but surely we should be able to claim back whatever it is we have paid if we end up out of work! At the moment S class can not claim back anything if they end up unemployed. These are just some of the disadvantages of having to play S class.

This Government needs to be doing more to encourage the entrepreneurial spirit in its citizens. More time and money should be spent on creating the right environment for new home grown businesses to flourish rather than so much of it being spent on offering tax breaks to foreign businesses to encourage them to set up here. Especially when so many of these companies outsource their jobs to other countries anyway. I know Enterprise Ireland and other such bodies are trying by providing help and facilities for start ups but they have little or no money at the moment.

The Government could make it easier for those contemplating setting up a business by creating a fairer PRSI system for a start. There is risk enough involved in starting up a new business venture without losing your entitlements through having to pay class S as well.

The main reason people will set up businesses here and pay the wage levels, insurance costs, costs of living, etc, is that they like Ireland and want to be based here. This is why myself and my husband moved back home from the UK. We love Ireland and want to bring up our family here. With the economy the way it is now more of us have to create work for ourselves through setting up our own businesses if we want to stay in this country. 

Could the government please get behind its self-employed and help them out a bit.


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## z107 (1 Feb 2010)

*Re: PRSI system just another way of penalising entrepreneur's.*

The PRSI/income levy/health levy systems are going to be redesigned from scratch from 2011.
However, I doubt the inequality will be addressed. I always get the impression that the government believes that directors are hugely overpaid people who are constantly trying to fiddle the system to squeeze out a few extra cent. It makes me sick.
Of course some directors are on big wages, but a large proportion are on little more than minimum wage - or less.

Also, why can't directors avail of PAYE tax credits?


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## Purple (1 Feb 2010)

*Re: PRSI system just another way of penalising entrepreneur's.*

I agree 100% with the above posts.


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## csirl (1 Feb 2010)

*Re: PRSI system just another way of penalising entrepreneur's.*

PRSI needs major reform.

Everyone should pay the same rates and get the same benefits. And, like all insurance, it should be self funding.


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## Towger (1 Feb 2010)

*Re: PRSI system just another way of penalising entrepreneur's.*



csirl said:


> PRSI needs major reform.
> 
> Everyone should pay the same rates and get the same benefits. And, like all insurance, it should be self funding.


 
Don't worry is is comming, there do you think the goverments going to get next years 1B from.


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## DB74 (1 Feb 2010)

*Re: PRSI system just another way of penalising entrepreneur's.*

There should be just one PRSI Class for all and sundry.


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## Husker (2 Feb 2010)

*Re: PRSI system just another way of penalising entrepreneur's.*

Self-employed people pay PRSI at 3% of income whereas employees pay 4% plus their employer makes a contribution of over 10%.  You get what you pay for.  For additional benefits, you should expect to pay more.  I don't think 3% is excessive for the benefits you might accrue including a state pension once you retire.


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## ajapale (2 Feb 2010)

*Re: S class PRSI system another way of penalising entrepreneurs. (proprietary directo*

Have you considered joining (and playing a proactive part) ISME?


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## gearoid (2 Feb 2010)

*Re: S class PRSI system another way of penalising entrepreneurs. (proprietary directo*

I pay PRSI Class S and get almost no benefit from it whatsoever. I am already entitled to the full state pension through working full-time for 13 years. I am likely to lose my job in the coming months and have to re-train etc. without the benefit of unemployment assistance, as I wouldn't meet the means test. I am not cribbing but it is something which may well get me politically active for the first time.

I agree whole-heartedly that the system is biased towards those in full-time employment, and those who show less enterprise against those who move job, take risks, temporary contracts and try to improve themselves. Self-employed people need a stronger political voice but are a very divergent group. I'd be a middle-income earner and to me it only just about makes sense. Those self-employed on the minimum wage are the working poor. The unions are busy looking after their own cosseted and pampered members.


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## Welfarite (3 Feb 2010)

*Re: S class PRSI system another way of penalising entrepreneurs. (proprietary directo*



csirl said:


> Everyone should pay the same rates and get the same benefits. And, like all insurance, it should be self funding.


 
If it was self-funding, the benefits payable would be a lot less than the SW rates payable at present, I'd imagine. The Socila Insurance fund is already heavily subsidised by other taxes.


gearoid said:


> I am already entitled to the full state pension through working full-time for 13 years.


 
A state pension is based on an average of number of weeks per eyar from date of entry into PRSI system to 65 years of age. To get full state pension you must have a minimum of 48 weeks average PER YEAR from date of entry.


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## Ann1 (3 Feb 2010)

*Re: S class PRSI system another way of penalising entrepreneurs. (proprietary directo*

I could be wrong but is it not the case that self employed people can pay PRSI at Class A if they wish.?


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## Welfarite (3 Feb 2010)

*Re: S class PRSI system another way of penalising entrepreneurs. (proprietary directo*



Ann1 said:


> I could be wrong but is it not the case that self employed people can pay PRSI at Class A if they wish.?


 No they can't


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## DB74 (3 Feb 2010)

*Re: PRSI system just another way of penalising entrepreneur's.*



Husker said:


> Self-employed people pay PRSI at 3% of income whereas employees pay 4% plus their employer makes a contribution of over 10%. You get what you pay for. For additional benefits, you should expect to pay more. I don't think 3% is excessive for the benefits you might accrue including a state pension once you retire.


 
Self-employed people / proprietory directors pay PRSI at a 5% rate depending on their income level (€500 per week I think)

Some employees don't pay any PRSI at all (income of < €300 per week) but are still credited with a week's contribution

I have yet to meet a self-employed person who doesn't want to pay PRSI at Class A.


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## Husker (3 Feb 2010)

*Re: PRSI system just another way of penalising entrepreneur's.*



DB74 said:


> I have yet to meet a self-employed person who doesn't want to pay PRSI at Class A.


 
Including the employer contribution?  Because that is effectively what is being paid per class A contributor to "buy" the benefits.

According to the social welfare website, the self-employed contribution is 3% (unless this was changed in the Budget and has not been updated?).


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## z107 (3 Feb 2010)

*Re: S class PRSI system another way of penalising entrepreneurs. (proprietary directo*



> According to the social welfare website, the self-employed contribution is 3% (unless this was changed in the Budget and has not been updated?).


S0 is 3%
S1 is 7-8%
There is no ceiling on this either, unlike A class.
http://www.welfare.ie/EN/Publications/SW14/SW14_10/Pages/ClassS.aspx

Given the choice, I would far rather opt out of the PRSI system entirely. Next best for me would be 'A' class. 'S' class is worst of both worlds - paying but not getting anything. I doubt I'll even get a state pension.


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## DB74 (3 Feb 2010)

*Re: PRSI system just another way of penalising entrepreneur's.*



Husker said:


> Including the employer contribution? Because that is effectively what is being paid per class A contributor to "buy" the benefits.
> 
> According to the social welfare website, the self-employed contribution is 3% (unless this was changed in the Budget and has not been updated?).


 
PRSI contrib is 3%.
Health Levy contrib is 2% but again self-employed don't get illness benefit etc so it amounts to the same thing

eg - take a company director who earns a salary of €60K

Employers PRSI on this salary is €6,450

If the company goes bankrupt, under the current system, the director gets nothing from the State - no redundancy and no Jobseekers Benefit despite the fact that you have been paying PRSI & Levy contributions of €3,000 per year.


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## ninak (3 Feb 2010)

*Re: S class PRSI system another way of penalising entrepreneurs. (proprietary directo*

Glad to see so many people share my view of  S class PRSI. If the option was there to pay A class I would. Even if that meant paying both employees and employers contribution. Though I do believe that there should be a reduced rate for self employed, but I would pay more than I do now if it meant I would actually be entitled to something!! This should at least be an option for anyone on S class.


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