Developing a Fully Inclusive Social Insurance Model - Welfare.ie

The Table also shows the proportions of SIF income from the various contributor groups over the sameperiod. The proportion of total contribution income paid by employers increased from 60% in 1991 tojust under 73% in 2003 while the proportion paid by employees fell from 26% to 21% Contributions fromself-employed workers have risen from almost 4% to 5% over the same period. The table also shows theproportions of SIF income from the various contributor groups over the same period. The State'scontribution to the Fund has fluctuated over the years as this is a 'balancing item'. Legally, theExchequer is the residual financier of the Fund i.e. it meets the deficit between contributions receivedand benefits paid out in any given year. No contribution has been required since 1996 as the SocialInsurance Fund has been in surplus since that time. However, the State continues to make acontribution as an employer. The report on Integrating Tax and Social Welfare (Govt. of Ireland, 1996)held the view that an Exchequer contribution to the Fund should be maintained, reflecting acommitment to social solidarity. It noted the support of the Commission on Social Welfare to tri-partitefinancing, but not an adherence to a pre-stated share in the Fund.In recent years, the income of the SIF (including interest and any accumulated surplus) has been inexcess of expenditure and a surplus has built up. At the end of 2003, there was an annual surplus of€258m, with an accumulated surplus of €1,531 million. However, before that and for most of thelifetime of the SIF, the Exchequer was required to make up an annual deficit. Perhaps because suchsurpluses are a relatively recent phenomenon, there has been very little public debate about thedesirability or otherwise of taking a long-term 'actuarial' view of them and encouraging theiraccumulation in order to finance the long-term but predictable increase in costs (e.g. pensions costs).Table 1.1: Financing of the Social Insurance Fund, 1991, 1996 and 2003.1991 1996 2003 (Prov.)€000 % €000 % €000 %INCOMEState 185,433 9.6% 126,849 5.6% - 0.0%Employer PRSI (1) 1,157,804 60.1% 1,547,208 68.1% 3,693,623 72.6%Employee PRSI (1) 505,492 26.3% 605,541 26.7% 1,077,413 21.2%Self-Employed PRSI 73,495 3.8% 118,778 5.2% 277,696 5.4%Other Receipts 3,003 0.2% 281 0.0% 40,737 0.8%Total Income 1,925,226 100.0% 2,271,806 100.0% 5,089,469 100.0%Expenditure onSocial Insurance Schemes 1,925,226 2,271,806 4,833,654Surplus(2) 0 0 255,815(1) The breakdown between employer and employee contributions requires a detailed analysis of data collected by the RevenueCommissioners. The contributions are apportioned on the basis of the most recently available information and are of necessityprovisional.(2) EUR635m was transferred to the Exchequer in 2002.42 The expenditure of the SIF includes the administration costs relating to the payment of the benefits and pensions paid from the fund and thecollection of PRSI contributions. Accordingly, administration costs include staff costs, agency costs related to the payment of benefits (e.g An Post),agency costs related to the collection of PRSI (Revenue Commissioners), accommodation, equipment, supplies, postage, telephone and other relatedcosts are paid from the SIF.Department of Social and Family Affairs