First Previous (PART 2 Social Insurance) Next (Chapter 3 Self-Employed Contributors and Self-Employment Contributions)

26 2005

Social Welfare Consolidation Act 2005

Chapter 2

Employed Contributors and Employment Contributions

Employed contributors and insured persons.

[1993 s9(1)]

12. —(1) Subject to this Act—

(a) subject to paragraph (b), every person who, being over the age of 16 years and under pensionable age, is employed in any of the employments specified in Part 1 of Schedule 1, not being an employment specified in Part 2 of that Schedule, shall be an employed contributor for the purposes of this Act, and

(b) every person, irrespective of age, who is employed in insurable (occupational injuries) employment shall be an employed contributor and references in this Act to an employed contributor shall be read accordingly, and

(c) every person becoming for the first time an employed contributor shall thereby become insured under this Act and shall thereafter continue throughout his or her life to be so insured.

[1993 s9(2)]

(2) Regulations may provide for including among employed contributors persons employed in any of the employments specified in Part 2 of Schedule 1.

[1993 s9(3)]

(3) Regulations may provide for—

(a) excluding particular employments or any classes of employment from the employments specified in Part 1 of Schedule 1, or

(b) adding to the employments so specified particular employments or any classes of employment,

and, where the Minister considers that any modifications of this Act are appropriate having regard to the purpose for which the regulations are made, the regulations may make those modifications.

[2003 (MP) s19(a)]

(4) For the purposes of this Part, with regard to employment specified in paragraph (13) of Part 1 of Schedule 1, the person who is liable to pay the wages or salary of the individual concerned in respect of the work or service concerned is deemed to be the individual’s employer.

Employment contributions.

[1993 s10(1)(a)]

13. —(1) Employment contributions shall be paid by employed contributors and their employers in accordance with this section.

[SWA 2000 s8; SWA 2001 s8, 36 & Sch E]

(2) (a) Where in any contribution week a payment of not more than €287 per week (or the equivalent thereof in respect of an employed contributor remunerated otherwise than on a weekly basis) is made to or for the benefit of an employed contributor in respect of reckonable earnings of that contributor relating to an employment, a contribution shall not be payable by that employed contributor in respect of those earnings from that employment.

[SWA 1995 s6; SWA 2001 s8, 36 & Sch E]

(b) Subject to paragraph (c) and to regulations under section 14 , where in any contribution week a payment of more than €287 is made to or for the benefit of an employed contributor in respect of reckonable earnings of that employed contributor, there shall be payable a contribution by the employed contributor at the rate of 4 per cent of the amount of reckonable earnings in excess of €127 in that week in respect of each employment (or the equivalent thereof in the case of an employed contributor remunerated otherwise than on a weekly basis) to which that payment relates.

[1993 s10(1); 2004 s5(1)]

(c) Where in a particular contribution year an employed contributor’s reckonable earnings have amounted to the sum of €44,180 and the contributions payable under paragraph (b) have been paid in respect of those reckonable earnings, no further such contribution shall be payable in respect of any reckonable earnings of that employed contributor by the employed contributor in that contribution year.

(d) Subject to subsection (8) and to regulations under section 14 , where in any contribution week a payment is made to or for the benefit of an employed contributor in respect of reckonable earnings of that employed contributor, there shall be payable a contribution by the employed contributor’s employer—

(i) at the rate of 7.8 per cent of the amount of the reckonable earnings in that week to which that payment relates where those reckonable earnings do not exceed €356 (or the equivalent thereof in the case of an employed contributor remunerated otherwise than on a weekly basis), and

(ii) at the rate of 10.05 per cent of the amount of the reckonable earnings in that week to which that payment relates where those reckonable earnings exceed €356 (or the equivalent thereof in the case of an employed contributor remunerated otherwise than on a weekly basis).

[2003 (MP) s17; 2003 s13]

(e) For the purposes of this Chapter—

“payment” includes a notional payment;

“notional payment” has the meaning given to it by section 985A (inserted by section 6 of the Finance Act 2003 ) of the Act of 1997.

[1993 s10(2); 2001 s8(2)(e)]

(3) (a) The Minister may by regulations vary the sums specified in subsection (2)(c) and any variation has effect from the beginning of the contribution year following that in which the regulations are made.

(b) When making regulations under this subsection to vary the sum specified in subsection (2)(c) the Minister shall take into account any changes in the average earnings of workers in the transportable goods industries so recorded by the Central Statistics Office since the date by reference to which the sum specified in subsection (2)(c) was last determined.

[1993 s10(3)]

(4) The employer shall, in relation to any employment contribution, be liable in the first instance to pay both the employer’s contribution comprised therein and also, on behalf of and to the exclusion of the employed contributor, the contribution comprised therein payable by the contributor.

[1993 s10(4)]

(5) An employer shall be entitled, subject to and in accordance with regulations, to recover from an employed contributor the amount of any contribution paid or to be paid by the employer on behalf of that contributor and, notwithstanding anything in any enactment, regulations for the purposes of this subsection may authorise recovery by deductions from the employed contributor’s remuneration, but those regulations shall provide that—

(a) where the employed contributor does not receive any pecuniary remuneration either from the employer or from any other person, the employer shall not be entitled to recover the amount of any such contribution from that contributor, and

(b) where the employed contributor receives any pecuniary remuneration from the employer, the employer shall not be entitled to recover any such contribution otherwise than by deductions.

[1993 s10(5)]

(6) Notwithstanding any contract to the contrary, an employer shall not be entitled to deduct from the remuneration of a person employed by the employer, or otherwise to recover from the person, the employer’s contribution in respect of that person.

[1993 s10(6)]

(7) Any sum deducted by an employer from remuneration under regulations for the purposes of this section is deemed to have been entrusted to the employer for the purpose of paying the contribution in respect of which it was deducted.

[1996 s12(1); 2001 (No.2) s5(1)(c)]

(8) In the case of employment specified in paragraph 12 of Part 1 of Schedule 1, subsection (2)(d) shall be read as if “0.5 per cent” were substituted for “7.8 per cent” and “10.05 per cent”.

[1995 s10]

(9) Regulations may, subject to the conditions and in the circumstances that may be prescribed, exempt an employer who employs an employee under and by virtue of a scheme administered by the Department of Social and Family Affairs, known as the Employers’ Pay-Related Social Insurance Exemption Scheme, from the liability to pay the contribution specified in section 13 (2)(d) in respect of that employee.

[2004 (MP) s14]

(10) Where, for a year of assessment (within the meaning of the Tax Acts), the Revenue Commissioners and an employer enter into an agreement under a specified provision of the Act of 1997 whereby the employer will account to the Revenue Commissioners, in accordance with that provision, in respect of the income tax due on qualifying emoluments (within the meaning of that provision) and where that agreement is not null and void, then in respect of those qualifying emoluments—

(a) the employer—

(i) as part of that agreement and in so far as the qualifying emoluments are comprised of reckonable earnings of an employed contributor to which the agreement applies, shall pay a contribution at a rate of 14.05 per cent in respect of the aggregate of the amount of those reckonable earnings and the amount of income tax payable under the agreement in respect of them, and

(ii) notwithstanding section 13 (4) or Article 7 of the Regulations of 1996, shall not be entitled to recover from an employed contributor any part of a contribution paid in accordance with subparagraph (i),

and

(b) a contribution paid in accordance with paragraph (a)(i) shall not be regarded as an employment contribution for the purposes of any benefit specified in section 39 (1).

[2004 (MP) s14]

(11) In subsection (10) “specified provision” means any provision that may be prescribed for the purposes of that subsection.

Modified insurance.

[1993 s11(1); 2005 (SW&P) s26 & Sch 4]

14. —(1) Regulations may modify this Part in its application in the case of—

(a) persons employed in any of the employments specified in paragraphs 2, 3, 4, 5, 9 and 10 of Part 1 of Schedule 1, or

[1996 s12(2); 2005 (SW&P) s26 & Sch. 4]

(b) in the cases that may be prescribed, persons employed in eircom plc, or

[2001 s28]

(c) in such cases as may be prescribed, persons who, on 5 April 1995 were employed in an employment to which paragraph (a) or (b) applies and which is prescribed, and who cease to be so employed, but immediately on such cessation become employed in another employment which is prescribed, under terms and conditions which provide that the person continues to be employed in a permanent and pensionable capacity and for payment during illness on a basis considered adequate by the Minister, or

(d) persons employed in a statutory transport undertaking, or

(e) persons employed as teachers in primary schools which are recognised schools within the meaning of the Education Act 1998 , or

(f) persons employed as teachers in training colleges recognised by the Minister for Education and Science for teachers in primary schools, or

(g) persons employed as teachers in post-primary schools which are recognised schools within the meaning of the Education Act 1998 , or

(h) persons employed as teachers in domestic science training colleges funded by moneys voted by the Oireachtas for that purpose, or

(i) persons employed as members of the Army Nursing Service, or

(j) persons employed in voluntary hospitals to which grants are paid from moneys provided by the Oireachtas in recoupment of revenue deficits, or

(k) persons employed by voluntary organisations which are providing district nursing services, or

(l) persons employed in an employment which is an insurable (occupational injuries) employment under section 71 .

[1993 s11(2)]

(2) This section is without prejudice to the generality of any other provision of this Part providing for regulations.

Calculation of reckonable earnings.

[1993 s12(1)]

15. —(1) For the purposes of this Part, reckonable earnings may be calculated or estimated, either for a person or a class of persons, in the manner, by reference to the matters and on the basis that may be prescribed.

[1993 s12(2); 2001 s37 & Sch F]

(2) Regulations may provide for the calculation of the amounts payable in respect of employment contributions in accordance with prescribed scales, and for adjustments of those amounts to facilitate computation and to avoid fractions of 1 cent in the amounts.

Employment by more than one employer.

[1993 s13; 2001 s8(3)]

16. —Regulations may provide for the determination of liability for the payment of employment contributions in the case of a person who works under the general control or management of a person who is not his or her immediate employer.

Payment of contributions and keeping of records.

[1993 s14(1)]

17. —(1) Regulations may provide for—

(a) the time and manner of payment of employment contributions,

(b) the collection and the recovery of, and the furnishing of returns by employers in relation to, employment contributions,

(c) the charging of interest on arrears of employment contributions,

(d) the waiving of interest due on arrears of employment contributions,

(e) the estimation of amounts due in respect of employment contributions and appeals in relation to those estimates,

(f) the furnishing of returns by employers in relation to periods of insurable employment,

(g) the deduction by an employer from the reckonable earnings of an employed contributor of any employment contribution reasonably believed by the employer to be due by the contributor, and adjustment in any case of over-deduction, and

(h) any matter ancillary or incidental to any of the matters referred to in any of paragraphs (a) to (g).

[1993 s14(2)]

(2) Without prejudice to the generality of subsection (1), regulations under that subsection may provide for—

(a) the assignment of any function relating to any matter referred to in that subsection to the Collector-General or to any person engaged under contract by the Minister, with the consent of the Minister for Finance, for this purpose,

(b) the assignment to the Collector-General of any function conferred on the Minister by section 272 and the modification for that purpose of any provision of that section,

(c) the inspection by or on behalf of the Revenue Commissioners of records prescribed under subsection (5),

(d) treating, for the purpose of any right to benefit, contributions paid after the due dates as paid on those dates or on any later dates that may be prescribed, or as not having been paid, and

(e) treating as paid, for the purpose of any right to benefit, employment contributions payable by an employer in respect of an insured person which have not been paid, where the failure to pay those contributions is shown not to have been with the consent or connivance of the insured person or attributable to any negligence on the part of the insured person.

[1993 s14(3)]

(3) Nothing in any regulations under this section affects the liability of the employer under section 13 (4) to pay employment contributions.

[1993 s14(4); 2002 (MP) s14(a)]

(4) The provisions of any enactment, regulation or rule of court relating to—

(a) the inspection of records, the estimation, collection and recovery (including the provisions relating to the offset of taxes and appropriation of payments in Chapter 5 of Part 42 of the Act of 1997) of, or the furnishing of returns by employers in relation to, income tax, or

(b) appeals in relation to income tax, or

(c) the publication of names of persons under section 1086 of the Act of 1997,

shall apply in relation to employment contributions which the Collector-General is obliged to collect as if the contributions were an amount of income tax which the employer was liable to remit to the Collector-General under the Income Tax (Employments) (Consolidated) Regulations 2001 (S.I. No. 559 of 2001).

[1993 s14(5); 2004 (MP) s16(1)]

(5) For the purposes of this Part, regulations may require employers to keep any records that may be prescribed in relation to the earnings of persons employed by them and the periods during which those persons were employed, and to retain those records for prescribed periods.

Priority debts to Social Insurance Fund in a company winding-up.

[1993 s15(1); 1997 s35 & Sch G]

18. —For the purposes of section 285 (2)(e) of the Companies Act 1963

(a) the amount referred to in that subsection is deemed to include any amount—

(i) which, apart from Article 9 of the Regulations of 1996 would otherwise have been an amount due at the relevant date in respect of sums which an employer is liable under Chapter 2 or 3 of Part 2 and any regulation thereunder (other than the said Article 9) to deduct from reckonable earnings or reckonable emoluments, to which those Chapters apply, paid by the employer during the period of 12 months next before the relevant date, and

(ii) with the addition of any interest payable under Article 10 of the Regulations of 1996,

and

(b) notwithstanding subsection (1) of section 285 of the Companies Act 1963 , the relevant date is deemed to be the date which is the ninth day after the end of the income tax month in which the relevant date (within the meaning of that subsection) occurred.

Winding-up and bankruptcy.

19. —(1) In this section “Act of 1988” means the Bankruptcy Act 1988 .

[1993 s16(1); 2005 (SW&P) s26 & Sch 4]

(2) The assets of a limited company in a winding-up under the Companies Acts 1963 to 2005 shall not include—

[1993 s16(2)]

(a) any sum deducted by an employer from the remuneration of an employee of the employer paid before the winding-up in respect of an employment contribution due and unpaid by the employer in respect of that contribution, or

(b) any sum which would have been deducted from the remuneration of an employee in respect of an employment contribution for a period of employment before a winding-up had that remuneration been paid before the winding-up,

and in such a winding-up a sum equal in amount to the sum so deducted and unpaid or which would have been deducted and payable shall, notwithstanding anything in those Acts, be paid to the Social Insurance Fund in priority to the debts specified in section 285(2) of the Companies Act 1963 .

[1993 s16(3); 2005 (SW&P) s26 & Sch 4]

(3) A sum equal in amount to any sum deducted by an employer from the remuneration of an employee of the employer in respect of an employment contribution due by the employer and unpaid by the employer in respect of the contribution before the date of the order of adjudication or the filing of the petition for arrangement (as the case may be) shall not form part of the property of the bankrupt or arranging debtor so as to be included among the debts which under section 81 of the Act of 1988 are in the distribution of that property to be paid in priority to all other debts, but shall, before the distribution and notwithstanding anything in the Act of 1988, be paid to the Social Insurance Fund in priority to the debts specified in section 81 of the Act of 1988.

[1993 s16(4); 2005 (SW&P) s26 & Sch 4]

(4) Formal proof of a debt to which priority is given by this section is not required except where required by or under the Act of 1988 or the Companies Act 1963 .

[1993 s16(5); 2005 (SW&P) s26 & Sch 4]

(5) There shall be included among the debts which under section 81 of the Act of 1988 are, in the distribution of the property of a bankrupt or arranging debtor, to be paid in priority to all other debts, all employment contributions payable by the bankrupt or arranging debtor during the 12 months before the date of the order of adjudication in the case of a bankrupt or the filing of the petition for arrangement in the case of an arranging debtor, and that Act has effect accordingly, and formal proof of the debts to which priority is given under this subsection is not required except in cases where it may otherwise be provided by general orders made under that Act.