ISME: Welfare penalises self-employed
ISME said the current differences in the social welfare system meant the self-employed struggled to access any benefits, with the knock-on effect of disincentivising entrepreneurship at a time when the economy needed it to create jobs.
ISME chief executive, Mark Fielding, described the current social welfare system as “completely unfair, based on antiquated, bureaucratic and cumbersome legislation, which penalises the self-employed and denies their social welfare entitlements:
“There is something badly wrong with a system that provides automatic welfare entitlements to employees in the event of a company closing, but will not give a red cent to the company owner, leaving thousands of individuals and their families on the bread line,” he said.
Brendan Dempsey, regional president of the St Vincent De Paul in Cork, recently attributed his office’s financial strains in part on the high number of self-employed people seeking help from the SVP.
He claimed that the current system was “a national disgrace, hari-kari if I may say, because these people have built the country up”.
Jim Curran, ISME head of research, said the evidence was anecdotal and came from people who would have contacted ISME, but that the hardships faced by the self-employed no longer in work were very real.
He said the system should be changed to allow self-employed people the opportunity to pay the same PRSI contribution as those in regular employment, meaning it would be easier to access benefits were their business to fail.
“It is anecdotal but a lot of people would have used their savings to keep the company afloat so in a lot of cases they are worse off than employees who lose their jobs,” Mr Curran said.
ISME highlighted numerous differences in which self-employed people are treated differently from regular employees, if they fall on hard times:
*No immediate entitlement to benefits
*Fully means tested
*All savings fully assessed
*All income fully assessed
*Co-habitee income fully assessed
*Value of property, other than family home fully assessed
*Invalidity and disability not covered.
A spokesperson for the Department of Social Protection said people who have urgent income support needs can apply for the means-tested Supplementary Welfare Allowance (SWA) and more than 95% of basic SWA applications are decided on, and paid, within the week.
The spokesperson said that there are “no current plans to extend cover for short-term benefits to this group of insured workers” due to the “significant financial implications”.
