The Social Welfare Bill was passed in the Dáil last month and was subsequently signed by President Higgins to be enacted into law as Social Welfare Act 2012 (Act No. 43 of 2012). The Act gives effect to a number of social welfare measures announced in Budget 2013. These include the abolition of the weekly PRSI allowance of €127 from 1 January 2013 and an increase in the minimum rates of the Pay-Related Social Insurance contribution payable by self-employed contributors with effect from 1 January 2013.

The Act provides for the abolition of the weekly PRSI free allowance for employees within the PRSI net of €127 from 1 January 2013. Under the PRSI system, no employment contribution is liable to be paid where an employee has weekly earnings of €352 (approx €18,300 per annum) or less and this has not changed.

The Act also provides for an increase in the minimum rates of the PRSI contribution payable by self-employed with effect from 1 January 2013. Generally, self-employed taxpayers with income over €5,000 pay PRSI at the rate of 4%, subject to a minimum payment. This minimum payment is increased from €253 to €500, with effect from 1 January 2013. Also, those who currently pay a flat rate PRSI contribution of €157 are now liable to pay an increased amount of €310 with effect from 1 January 2013.

The Social Welfare Act also amends section 29 of the Redundancy Payments Act 1967 by abolishing the rebates paid to employers in respect of statutory redundancy lump-sums paid to their employees. This applies in the case of statutory redundancy lump-sum payments made to employees who are made redundant on or after 1 January 2013.

The Social Welfare Act can be accessed from the Oireachtas website.