Illness benefit is the primary short term income support provided by my Department to those who are unable to work due to illness of any type and who are covered by social insurance. Eligibility for illness benefit depends on the person’s PRSI record and class. The person must have made the required number of contributions under class A, E, H or P to qualify. In general, self-employed people make PRSI contributions at class S which does not provide entitlement to illness benefit.
Self-employed contributors pay class S PRSI at a rate of 4.2%. This is 11.25 percentage points lower than the combined employer and employee contribution of 15.45% made in respect of employed contributors. However, self-employed contributors do have access to over 90% of benefits available to employed contributors. The only benefits that class S PRSI does not provide access to are health and safety benefit, illness benefit and occupational injuries benefits.
The cost of extending illness benefit to the self-employed was considered as part of the last Actuarial Review of the Social Insurance Fund as at 31 December 2020 which was published in March 2023. The review found that if the benefit was extended to all self-employed contributors from 2024, the annual cost to the Social insurance Fund would be around €87 million by the end of 2030.
The Programme for Government includes an action to explore the option of giving self-employed workers access to illness benefit by means of making a higher PRSI contribution. My Department has commenced work in this regard. This work includes analysis and assessments of potential costings and the appropriate PRSI rates required in those contexts.
Any changes to the current system would need to be considered in an overall policy and budgetary context.
