The report of the Advisory Group on Tax and Social Welfare published last month recommends that Class S benefits should be extended to provide cover for people who are permanently incapable of work because of a long-term illness or incapacity, through the Invalidity Pension and the Partial Capacity Benefit. This should be funded by an increase in the rate of contribution for Class S (currently 4%) of at least 1.5%. Chartered Accountants Ireland has publicly disputed this recommendation.

The Advisory Group was established in June 2011 by the Minister for Social Protection and this recent report “Extending Social Insurance Coverage for the Self-Employed” is concerned with the extension of social insurance cover for self-employed people and the associated technical and financial issues.

A number of recommendations are made in the report (Chapter 5) and include:

• Social Insurance for the self-employed should be extended to provide cover for people who are permanently incapable of work because of a long-term illness or incapacity.
• Extension to provide cover for long term ill health or incapacity should be on a compulsory basis.
• The rate of contribution for Class S should be increased by at least 1.5%.
• Simplifying the methodology for assessing means for Jobseeker’s Allowance should be considered.
• The social insurance system should not discourage entrepreneurs.

The report is published in full on the Department of Social Protection website