This from the
www.welfare.ie site:
"2. Family Employments that Are Covered for Social Insurance (PRSI)
The following categories of 'Family Employment' are insurable under the Social Insurance system in exactly the same way as employments that have no family connection:
- If you are employed as an employee by a 'prescribed relative'* and the employment is not related to a private dwelling house or a farm in or on which both you and the employer reside (PRSI Class A or Class J applies).
- If you are employed as an Apprentice by a 'prescribed relative'* (even if the apprenticeship employment does relate to a private dwelling house or a farm in or on which both you and the employer resides). There must be a registered Contract of Apprenticeship involved (PRSI Class A or Class J applies).
* A 'Prescribed relative' is a parent, grandparent, stepparent, son, daughter, grandson, granddaughter, stepson, stepdaughter, brother, sister, half-brother, or half-sister.
3. Family Employments that Are Not Covered for Social Insurance (PRSI)
The following categories of 'Family Employment' are the exceptions that are
not covered by the Social Insurance system:
- If you are employed as an employee by your spouse.
- If you are employed as an employee by a 'prescribed relative' and the family employment relates to a private dwelling house or a farm in or on which both you and the employer reside.
- If you assist or participate in the running of the family business but not as an employee. (For example, a son/daughter who is attending full-time education who participates in the business (e.g. farm) after school hours or a spouse who carries out book-keeping work for the business – but is not an employee).
NOTES
(1) Even though you may not be insurable for social insurance purposes PRSI Class K (Health Contribution) may be payable.
(2) PRSI Class M is used to record situations in which there is no liability whatever to either Social Insurance or Health Contribution.
(3) Subject to certain conditions, if you cease to be covered by compulsory PRSI you may opt to become insured on a voluntary basis and pay Voluntary Contributions. For further details please see the Department’s information leaflet "Guide to Voluntary Contributions" (SW 8).
4. Point to Remember
'Employed as an Employee' means that you are employed in the family business under the same terms and conditions as a worker who is not a relative. You would, for example, be subject to control, direction and dismissal by the employer, receive a salary and holiday pay and have no control over the running of the business.
5. Limited Companies and Partnerships
If the business is either a Limited Company or Partnership it has a separate legal entity. Employment in such a business is
not 'Family Employment' because the employment relationship is with the Limited Company or Partnership rather than the individual family member who owns/runs it.
Limited Company
If you work for a Limited Company that is owned by a spouse or a family member, the PRSI you pay is determined by the circumstances of your employment.
- If employed as an employee you are insurable (PRSI Class A or Class J applies).
- If you are not an employee but participate in the running of the company or if you hold a directorship/shareholding position and have control over its operations, you may be treated as a self-employed contributor. PRSI Class S applies if you have reckonable income of at least €3,174 per year from all sources.
The key question is whether or not you are employed as an employee. The factors that are taken into account in deciding this matter are quite complex. They are set out in a "Code of Practice for determining Employment or Self-Employment status of Individuals" – copies of which are available from the Department.
Partnerships
Two or more family members who operate a business as a Partnership and share the profits may be insurable as self-employed contributors at PRSI Class S, provided each has a reckonable income of at least €3,174 per year from all sources.
The following points should be noted:
- The Partnership must be genuine and supported by appropriate documentary evidence such as, the existence of joint business accounts with banks, etc. There should also be evidence that business activities are in joint names including Invoices, Mart, Creamery Accounts, Cash & Carry Accounts, Farm Grant Applications, Herd Numbers, Business Insurance Policies, etc.
- The most important indicator of the existence of a business partnership is the sharing of profits (or losses). Income Tax returns of each partner showing his/her share of the profits should be available. In the case of married couples making income tax returns under joint or separate assessment, the income of each must be shown.
- The Income Tax returns should be correctly made on a current year basis - applications for the backdating of Partnership status are not accepted. "