Minister Doherty extends Invalidity Pension to the self-employed

From 1st December, Minister for Employment Affairs and Social Protection Regina Doherty extends the Invalidity Pension scheme to self-employed workers for the first time. This includes small business owners, farmers, tradespeople, freelancers, contractors and professionals. It is expected that this improvement will cost in the region of €23million in 2018. According to the CSO Quarterly National Household Survey Q2, 2017, there are over 326,000 self-employed people in Ireland.

It means that people who work for themselves and pay PRSI at Class S will, from 1st December, have the option of applying for Invalidity Pension on a similar basis to those who are employees. Invalidity Pension is a pension payment for people who cannot work because of a long-term illness or disability. For the first time, the self-employed will have access to the safety-net of State income supports if they have a serious illness or injury that prevents them from working without having to go through a means test.

This follows access for the self-employed to the Treatment Benefit Scheme since March 2017 which includes free eye tests, dental examinations and contributions towards the cost of hearing aids with additional dental and optical benefits being provided from October 2017 for both the self-employed and employees.

A public awareness campaign on Invalidity Pension being extended to the self-employed will run over the next 10 days starting on Monday, 20th November via print, broadcast and digital media.

Minister Doherty welcomed the improved social welfare measures being provided for the self-employed: “These measures are part of the Government’s policy of making work pay and encouraging self-employment and entrepreneurship. It is a real advance in the level of cover available to the self-employed and it is in line with the commitment in the Programme for a Partnership Government for an improved PRSI scheme for the self-employed.

“This measure will give the self-employed access to the safety-net of State income supports if they have a serious illness or injury that prevents them from working. It is based solely on their PRSI contributions, it is not means assessed and whatever savings or assets they have will not affect their payment. Similarly, if their partner is working, that income will not affect the payment of the Invalidity Pension. Furthermore, I have been able to introduce this measure without increasing the rate of PRSI paid by employees, employers and the self-employed. The current Class S rate of PRSI paid by the self-employed pay is 4%.”

The Minister confirmed that it is also open to self-employed who are currently out of work through illness to claim the Invalidity Pension if they have the relevant PRSI contributions on their social insurance record.

Note for Editors

Invalidity Pension is a weekly payment for people who cannot work because of a long-term illness or disability. The current personal rate of payment is €198.50 per week. Increases may be paid also for a dependent adult (means-assessed) and dependent children.

From 1st December this year, to qualify for an Invalidity Pension from the Department of Employment Affairs and Social Protection, a self-employed person or employee must have:

• 260 PRSI paid contributions (Class A, E, H or S) since they started paying social insurance and
• 48 PRSI paid or credited contributions (Class A, E, H or S) in the last complete contribution year or the second last contribution year before the date of their claim

For claims made during December 2017, the last complete contribution year is 2016 and the second last contribution year is 2015.

For claims made in 2018, the last complete contribution year is 2017 and the second last contribution year is 2016.

Invalidity Pension is paid as long as the person continues to satisfy the qualifying conditions. On their 66th birthday, a person who is receiving Invalidity Pension will automatically transfer to the State Pension (Contributory). For those under age 66, the payment will discontinue if they get any other payment from the Department of Employment Affairs and Social Protection (except Disablement Benefit and half-rate Carer’s Allowance).

People who receive Invalidity Pension also receive the Department’s Free Travel Pass (this is not means assessed). Also, they may qualify for extra social welfare benefits, for example, the Household Benefits Package but this is means assessed.

Invalidity Pension is taxable.