# Self Employed - no rights



## Deise Doll (20 Apr 2009)

Listening to Liveline today I felt so sorry for a lady called Ann who epitomises the plight of many Self Employed people in Ireland today.
She had employed 10 people and had paid her prsi contributions for years yet her former employers are entitled to S.W. Payments and she is not, and is surviving on 200 *per month *

[broken link removed]

Ann is the second lady on the programme. 

Like so many other self employed hardworking people that have paid taxes, prsi etc in this country.

Can someone tell me if this is common practice in other E. U. Countries that the Self employed are left with nothing. Could it be legal *surely it is discrimination* if contributions have been paid.


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## NicolaM (20 Apr 2009)

It is interesting , isn't it?

My guestimated self employed tax bill for next year (based on last year's really good income, then the preliminary estimate for 2009, which is wrong, since my income has dropped by >25% per week, as well as extended periods of being unemployed this year, which actually means that my income will probably be much than 50% of last year's) is considerably greater than the average industrial wage, not including the new levys.

It's a bit unfortunate, as is is hard to save money for my tax bill while I'm not working, so I'm not sure exactly how I'm going to pay this bill..

While I have been unemployed, which to be fair, has been only for 4 weeks so far this year, but is going to be more, I have been entitled to diddly squat. My mortgage etc still needs to be paid, along with the rest of the bills.
It certainly seems unfair, considering the amount of money/tax/PRSI I have put into the economy.

Nicola


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## NicolaM (20 Apr 2009)

Sure.
But it is a bit hard to take paying a very large amount of money in tax, and being entitled to diddly squat when the chips are down and there's no income.
That money is used to finance the health care system, and social welfare system etc, which is equitable, and I have no issues with contributing.

However, I don't feel that it is equitable to pay all this money, or like the person alluded to above, to employ people, and benefit the economy by job provision and thus economic growth, but then be entitled to faic when not able to make a living when the business is no longer viable.

Nicola


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## WaterSprite (20 Apr 2009)

jaybird said:


> You may have paid some PRSI but not as much as PAYE workers. Thats how it works. Surely people know this before they become self employed?



The PAYE workers themselves pay less than self employed, but it's the employer's PRSI payments in respect of the employees that brings the total up.

I have to say, it was a bit of a surprise to me (I'm just recently self-employed) and does strike me as unfair.  I never cast my mind to it beforehand - but probably should have!

And, generally speaking, PAYE workers don't pay PRSI and Health Levy on deposit interest (it appears to be an administrative collection issue rather than a policy decision) - but the self employed do.  That's an additional 9% (PRSI @5% and new Health @ 4%) on top of DIRT.  Ouchy.

The fact that we also don't get PAYE allowance strikes me as unfair too as it happens!  Anyone know the theory behind the PAYE allowance?


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## z109 (20 Apr 2009)

Which stuff do you think the self-employed don't get? (Apart from unemployment benefit which is funded by the 10.25% employer PRSI contribution - fancy paying an extra 10+% in tax? This is what the UK introduced with IR35 in 2000). UB lasts for nine months (I believe). After that, everyone is self-employed = means tested on income and productive assets.


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## WaterSprite (20 Apr 2009)

Here's a list (from Welfare.ie - this is what PAYE workers get but self employed don't):

State Pension (Transition) [was Retirement Pension]​• Guardian’s Payment (Contributory) • Invalidity Pension​ • Occupational Injuries Benefits​ • Treatment Benefit (Dental or Optical)​ • Jobseeker’s Benefit​ • Illness Benefit​ • Carer’s Benefit​ • Health and Safety Benefit

I'd imagine the one that's hurting people the most is the JB.
​


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## NicolaM (20 Apr 2009)

edited


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## z109 (20 Apr 2009)

NicolaM said:


> Like....Mortgage interest supplement?
> 
> Nicola


No bar to it. It is means tested like for everyone else.
The additional criteria (that apply to everyone) are that you must have been able to afford the loans at the time you took them out...

PS I only found out today that self-employed are eligible for it. Otherwise I might have claimed it when I was unemployed in 2001-2!


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## NicolaM (20 Apr 2009)

I edited my post just above as it was incorrect....


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## Bronte (21 Apr 2009)

I only heard bits of the programme, did I misunderstand the second ladies situation.  I thought she had two properties one of which was worth a million.  Therefore by virture of that being means tested she was ineligible for mortgage interest relief?  Presumable if she drops her price and sells she will after paying back the bank be eligible for mortgage interest supplement on her home if she does not then have any assets and as long as her home is an 'ordinary' house.

In relation to the first lady, ordinary mortgage on regular property, why was she ineligible for mortgage interest supplement?  This was somthing to do with I believe a ceiling on how much mortgage interest you can have, and also the point about being able to afford it when you bought it.  I cannot see how it is in the states interest to force people to sell their homes, (plus with debts due to negative equity) and then giving them rent allowance costing basically the same as the original mortgage.  How does this benefit anyone.


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## z109 (21 Apr 2009)

Bronte said:


> I cannot see how it is in the states interest to force people to sell their homes, (plus with debts due to negative equity) and then giving them rent allowance costing basically the same as the original mortgage.  How does this benefit anyone.


If the person is never going to be able to afford to buy their house, then the state will be paying the mortgage interest forever. Except that I believe mortgage interest supplement only lasts for a year. It is designed, I believe, to help you downsize/tide you over. It is not designed for long-term use.

As such, in the current environment, it is probably broken.

But, would you be happy to pay someone's interest on a million pound mortgage, say 35k a year (assuming a very optimistic 3.5% interest rate) when renting somewhere for them would be possible at 18k a year? (1500 a month for a three-bed semi or a nice apartment). 

Should all social welfare recipients be entitled to this level of rent/mortgage interest support? 
Should it be part of the welfare system that just because someone once had a lot, they get more out of it? Is that fair and equitable?

These are all difficult questions and aside from issue of fairness, they come down to money. The other difficult issue that has to be faced (and not specifically referring to the people on liveline) is that some people (many people relative to previous times) are effectively bankrupt.


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## callybags (21 Apr 2009)

The fact that we also don't get PAYE allowance strikes me as unfair too as it happens! Anyone know the theory behind the PAYE allowance?[/quote]

As far as i can recall the PAYE allowance was introduced in the early eighties. It was around the time of the PAYE marches where ordinary employees were complaining they were contributing the majority of the taxes and self employed had all sorts of reliefs available to them.

Also it was to compensate for having to pay as the money was earned rather than the following year.


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## Bronte (21 Apr 2009)

Yogenmayhew, I think the state should pay the mortgage interest on normal homes (average mortgages taken on on average properties) so of course I think the lady with the two properties should sell one and the state should pay the mortgage on the other home (if it's an average mortgage).  Hence my point about a payment of roughly mortgage interest equal to rental amount.  We are currently in a recession and is it not better for people to be helped out with mortgage interest relief for a couple of years until jobs are available again rather than wasting money on rent and turfing people out of their homes - and I say this as a landlord.  

I don't think you are correct and that the allowance only lasts a year.


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## z109 (21 Apr 2009)

http://www.welfare.ie/EN/Schemes/SupplementaryWelfareAllowance/Pages/MortgageInterstSupplement.aspx

You're right Bronte, there does appear to be no time limit, although it does say "short term". Another myth dies in my head!

I think the key concept in the above page is the idea that the state will pay mortgage interest supplement up to the rent allowance level. It doesn't make financial sense in these straightened times for the state to pay supplement for one or two people to live in a four bed house where they could rent an apartment instead. Particularly as there is no shortage of rental accommodation - landlords have to make a living too!


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