The Social Insurance Fund, which is funded by PRSI contributions from employers and workers, had record income of €12.6bn in 2021.

The 2021 annual report from the Department of Social Protection discloses that PRSI payment from the self-employed increased by 11.3% to €720m.

The Social Insurance Fund (SIF) pays for the contributory state pension, Jobseeker’s Benefit as well as illness and disability benefits.

In 2021, the SIF also funded the Pandemic Unemployment Payment scheme, with the PUP outlay for the year amounting to €4bn.

The Employment Wage Subsidy Scheme, which cost taxpayers €4.6bn through 2021, was paid from Exchequer resources and not the SIF.

In Association with

In 2021, employers paid €7.9bn into the SIF in employer PRSI. Employers also paid an additional  €800m into the SIF through the National Training Fund, a 1% levy on the gross salaries of employees that the employer pays.

Total employer payments into the SIF in 2021 came to €8,700m compared with €9,100m in combined employer PRSI and NTF payments in 2019, pre-Covid.

The reduction from 2019 to 2021 was because employers availing of the EWSS scheme in 2021 enjoyed reduced rates of employer PRSI.

Employee PRSI payments into the SIF in 2021 came to €3.2bn. For context the total Income Tax yield in 2021 was €26.7bn.

Employers receive no benefit from their massive contributions to the Social Insurance Fund.

Until a decade ago, the SIF helped fund redundancy costs for employers, but Labour’s Joan Burton scrapped that small employer benefit.

In the annual report, Damien English, Minister of State with responsibility for Redundancy and Insolvency Operations and Employer Services, notes that emergency provisions to reduce the pressure on employers to pay redundancy who were already struggling, were lifted in September 2021.

A new Covid related lay-off payment scheme was introduced in September 2021 that would recompense employees who are being made redundant for time spent on enforced lay-off arising from the pandemic.

In recognition of the fact that these periods of lay-off were due to state restrictions, the state will met these costs. This new payment will be in addition to normal statutory redundancy.

“The payment ensures employees who were placed on temporary lay-off over the last two years due to Covid restrictions and who are made redundant are not disadvantaged,” said English.

The Social Insurance Fund funds redundancy payments for employees where an employer is unable or unwilling to make the statutory redundancy payment. When a payment is made under these schemes it becomes a debt against the employer.

“The department has a dedicated debt recovery unit which manages all aspects of the recovery process,” said English.

In 2021, the Department of Social Protection secured €8.7m ‘debt recovery’ payments from 1,335 employers who no doubt had paid way more than that into the SIF over the years.