Operational Guidelines: PRSI - PRSI Refunds Section

Refunds of PRSI may be made to employers and employees where contributions have been paid in error.

Applications for refunds cannot be made earlier than the last day of the contribution year in respect of which the contributions were paid.

Since 1 January 2010, an application for a PRSI refund must be made within four years of the last day of the contribution year in respect of which the contributions concerned were paid.

Where there is doubt as to the correct rate of PRSI contribution, cases may be referred to the department's Scope Section for a formal decision.

In cases where a refund is due, amendments to the social insurance record of the person involved may be required.

Requests for refunds can be initiated by an employee, an employer or their accountant/agent, the department's Pensions Services Office in Sligo, the department's Scope Section or the Revenue Commissioners.

On the death of an insured person, a refund due in the name of that person may be claimed by his or her beneficiaries, personal representatives, next-of-kin, creditors or other such persons as deemed by the department to be beneficially entitled.

PRSI refunds are paid by EFT (Electronic Funds Transfer). A Bank Identifier Code (BIC), International Bank Account Number (IBAN) and Account Name are required.

The following amounts may be deducted from refunds:

• any benefit paid as a result of the payment of incorrect PRSI;
• any other outstanding debts recorded on the department’s debt recovery system (DRAS)
• an amount equal to the amount of any outstanding PRSI owed by the employer
• from an employer PRSI refund in respect of a debt created by the payment of redundancy or insolvency or JobsPlus from the Social Insurance Fund

There are a number of reasons why a person might be paying the wrong PRSI rate:

• they paid PRSI at class A or class S after the age of 66 years
• they paid PRSI under the age of 16
• they paid PRSI at class A instead of class S in their capacity as a Company Director, Sole Trader or in a Partnership
• they paid PRSI at class A instead of class B, C or D in their capacity as a civil or public servant recruited before 6 April 1995
• PRSI was paid on their full salary while they were getting Illness Benefit
• PRSI was paid on their full salary while they were getting Maternity or Adoptive Benefit
• PRSI was paid on their full salary while they were getting Paternity Benefit or Parent’s Benefit
• they paid maintenance to a spouse or partner enforceable by a court order
• they held an E101 Certificate/A1 Portable Document/Certificate of Coverage/Exemption Certificate
• they had no Contract of Service with their employer
• Subsidiary Employment - they paid PRSI at class A in a second employment while also paying PRSI at class B, C or D in their main employment in the civil or public service. The second employment is referred to as ‘Subsidiary Employment’

Further details on refund types are set out in Section 6 below.

The statutory provisions relating to the refund of PRSI contributions paid in error are contained in Chapter 6 of Part 2 of the Social Welfare Consolidation Act, 2005, as amended.

The relevant part of the Act commences with Section 34.

The relevant regulations are found in Chapter 2 of Part III of the Social Welfare (Consolidated Contributions and Insurability) Regulations, S.I. No. 312 of 1996, as amended by the Social Welfare (Consolidated Contributions and Insurability) (Amendment) (No. 2) (Refunds) Regulations, 1997 (S.I. 291 of 1997), the Social Welfare (Consolidated Contributions and Insurability) (Amendment) (Refunds) Regulations, 2002 (S.I. 268 of 2002), and the Social Welfare (Consolidated Contributions and Insurability) (Amendment) (No. 1) (Refunds) Regulations, 2003 (S.I. 698 of 2003).

The relevant part of the Regulation commences with Section 72.

Limit on refunds

With effect from 1 January 2010, an application for the return of PRSI contributions must be made within four years of the last day of the contribution year in respect of which the contributions concerned were paid. The legislation governing this four year limitation is contained in section 8 of the Social Welfare and Pensions (No. 2) Act 2009, which allowed for the insertion of a new section 38A to the Social Welfare Consolidation Act 2005.

Interest on refund of pension element of PRSI

Article 80 (1) of S.I. 312 of 1996 provides for the payment of interest on refunds paid in cases where the refund is in respect of the pension element of the PRSI contribution and where there is no entitlement to a State Pension (Contributory) or a State Pension (non-Contributory). The interest is calculated by reference to changes in the Consumer Price Index. There is no provision for interest to be paid on any other types of refunds. No employer’s refund is due in this category.

Employee applications for refunds

The quickest way for an employee to apply for a refund is online. Employees should apply for a PRSI Refund online at www.mywelfare.ie. To do this you must first register for a Public Services Card and associate your mobile phone with this registration.

An appointment for a Public Services Card registration can be made online at www.mywelfare.ie and by creating a profile on www.MyGovID.ie which can be completed speedily using any device (laptop, smartphone and so on).

An advantage to applying online is that employees can track the progress of their application using the www.mywelfare.ie facility.

For certain types of refund, additional documentation will be required which can be uploaded with your online application.

If an employee cannot use the online system they can download and complete Application form for Employee Refund of PRSI contributions (PRSI REF1).

Employer applications for PRSI Refunds

Employers who wish to apply for a refund on behalf of themselves or an employee(s) can download and complete application form for Employer Refund of PRSI contributions – PRSI Ref2

Completed forms can be posted to:

Non-PAYE employees (Special Collections)

PRSI contributions for employees who do not come within the PAYE income tax system are collected through the Special Collection system of the Department of Social Protection in Waterford.

Categories catered for by this collection system include, Social Welfare Branch Managers, locally employed non-diplomatic Embassy employees and Irish workers temporarily posted abroad.

If it is established after the examination of end of year returns that remittances of PRSI contributions were paid incorrectly to Special Collection Section, refunds are paid to the employer or employee by the Special Collection Section.

In cases where the refund is due to Special Contributors, claims for refunds should be made in writing for the relevant tax year and sent to:

Email: e101spc@welfare.ie

Self-employed persons who submit annual returns to Revenue under self-assessment

Persons in self-employment who paid Class S PRSI contributions through self-assessment in error, or in maintenance cases (in circumstances outlined in Section 6), should request an amended annual assessment to be issued by the Revenue Commissioners and any PRSI refund that may be due, will issue on foot of that request.

Voluntary Contributors

Voluntary PRSI contributions are only refundable if they are paid after the expiry of 12 months after the billing date of such contributions, or if a person becomes liable to pay compulsory PRSI during a year in which they have already paid voluntary contributions.

Applications for a refund of Voluntary Contributions must be made in writing to:

Further information can be found at: www.gov.ie/en/publication/47cee2-operational-guidelines-prsi-prsi-voluntary-contributions.

a) They were of pensionable age (Over 66) when they worked. Employees paying A class contributions who continue in employment after the age of 66 should pay PRSI at Class J. Self-employed individuals paying S Class contributions should pay PRSI at Class M after the age of 66.

Persons in respect of whom the Class A rate of contribution was paid instead of Class J. The Class J rate is payable in respect of employees aged 66 years or more; or employees whose total weekly earnings are less than €38.

b) They were aged under 16 when in employment

No PRSI contributions are payable in respect of persons aged under 16 years. Sometimes Class A or J contributions are paid in error.

c) They were self-employed (Company Director/Sole Trader/Partnership) who paid Class A instead of Class S PRSI contributions

d) As a permanent civil or public servant recruited before 6 April 1995 they paid class A instead of class B/C/D

e) PRSI was paid on their full salary while they were getting:

• Illness Benefit
• Maternity or Adoptive Benefit
• Paternity Benefit or Parent’s Benefit
• Occupational Injuries
• Health and Safety Benefit

Persons in receipt of Maternity/Adoptive/Paternity/Illness Benefit, Occupational Injuries or Health and Safety Benefit payments, who have mandated the benefit to their employer and are paid their full salary and charged full PRSI during the benefit period.

Please note that with effect from 1st January 2009 PRSI Refunds Section no longer deals with refunds on Maternity/Adoptive/Paternity/Parent’s Benefit /Illness Benefit/Occupational Injuries or Health and Safety Benefit payments for civil and public sector employees. It is the responsibility of the employer to allow PRSI relief at source on these payments.

f) They paid maintenance to a spouse or partner

In the case of a separated person who makes an enforceable maintenance payment, PRSI is levied at the point at which it is earned as part of the person's earnings or income and also as income in the hands of the receiving spouse. To prevent a double payment of PRSI in such cases, Section 37 of the Social Welfare Consolidation Act 2005 provides for the return of social insurance contributions to the maintenance payer from 6 April 2000. A PRSI refund application for maintenance payments must be accompanied by P21 Balancing Statements from the Revenue Commissioners for each year the refund is being applied for. PRSI relief is only given on maintenance to a spouse or partner. There is no PRSI relief on maintenance paid to dependents.

g) They held an E101 Certificate / A1Portable Document / Certificate of Coverage / Exemption Certificate

Persons issued with an E101 Certificate / A1 Portable Document as migrant workers within the EU or non-EU nationals on temporary assignment to Ireland may be exempt from paying PRSI contributions.

Persons issued with a Certificate of Coverage from a country with which Ireland has a bi-lateral Social Security Agreement on temporary assignment to Ireland may be exempt from paying PRSI contributions.

Persons issued with a PRSI Exemption Certificate from Special Collections Section may be exempt from paying PRSI contributions.

h) They had no Contract of Service with their employer

i) As a permanent civil or public servant recruited before 6 April 1995 they paid PRSI on another employment which was Subsidiary Employment

Class J applies to Public Servants who are insurable at the modified (Class B, C or D rates of PRSI) in respect of any concurrent second employments].

Pension Element Refund

Compulsory Social Insurance (PRSI) for employees commenced in 1953 and for the self-employed in 1988. The pension element of the contributions paid by both employed and self-employed contributors may be refunded in the case of contributors who entered insurable employment either as employees or self- employed after they had attained the age of 56 and who have no entitlement to either a State Pension (Contributory), or a State Pension (Non Contributory). Interest may be paid on these type of refunds. The interest is calculated by reference to changes in the Consumer Price Index. There is no provision for interest to be paid on any other types of refunds.

Statement of earnings

Refunds Section may require from the person's employer a statement of earnings in respect of each class of contribution where more than one class was paid in a contribution year.

Proof of age

In cases where the person is over the age of 66 and where the date of birth has not been recorded as verified on the department's records, Safe Registration will need to be obtained from a local Social Welfare Office in order to process the refund due to the client and his or her employer.

Maintenance cases

A PRSI refund application for maintenance payments must be accompanied by, for each year the refund is being applied for:

• A Statement of Liability from the Revenue Commissioners (formerly known as a P21)

or

• Acknowledgement of Income Tax Return

or

• Self-Assessment as received by Revenue Online Service (ROS)

Illness/Maternity/Adoptive/Paternity/Parent’s/Occupational Injuries or Health and Safety Benefit

Confirmation from employer of amount of benefit that was received, the dates that the benefit applied to and that the employer continued to pay full salary and charge full PRSI during the benefit period.

Where an employee was exempt from PRSI:

• E101 certificate / A1 Portable Document

or

• Certification of Coverage

or

• Exemption Certificate, if relevant