Im open to correction on this but I fail to see how the TCA system will be anymore sustainable than the current one?
I agree the whole system is unsustainable because up to now we have being squandering the employers contribution and not collecting it from all the people who are in earning an income which gives rise to a contriburity pension should pay the same contribution as employers do at present ,I am not sure that there is much point in responding to this.
The whole system is completely unsustainable and inequitable and tinkering around with it won't fix that. In fact, these proposals will make it more unsustainable.
The only solution is
1) Switch PRSI and USC to an account based system. You get out what you put in.
2) Integrate it with the new autoenrollment process
3) Hike the rates on the lower paid so that they put in enough to fund themselves.
Brendan
The like of Dunnes Stores the HSE and all employers who at present operate by employing lots of people on 18 hr/20 hr contracts need to be surcharged the same as if they were in full time employment, These part time employees finish up on the same rate of pension as full time employees so the system needs to reflect this fact,
The state Contributory pension is supposed to work out at around one third of the average industrial wageHi Retired
An interesting point. If I understand it correctly, there is no distinction between part-time and full time workers in the PRSI scheme.
However, employers pay a reduced rate of 8.6% on salaries below €20,000 a year. Over that, and they pay 10.85%
I am not sure of the rationale for this lower rate. So it would seem equitable to get rid of it.
Having said that, it would not raise much money for the SIF. It would cost an employer an extra €450 for someone on a salary of €20,000.
Don't forget that a self-employed person declaring a salary of €20,000 pays a total of €800 a year into the SIF. A PAYE employee would pay or have paid on his behalf, a total of 14.85% or €3,000.
Brendan
View attachment 3016
The point is if you look up the department web site you will see the aim is to have a state contributory pension of one third of the average industrial wage with ether 30 or 40 years service ,I understand your calculations, but what is your point?
Someone on home caring duties or who is unemployed gets credits and so they get the full pension as well.
A self-employed person declaring €20,000 a year pays €800 into the fund and gets the full pension.
Dunnes Stores pays €1,600 PRSI on someone earning €20,000.
I have posted
My final submission to consultation on Contributory Pension
I have highlighted this point
The pension which a person receives in retirement must be linked to the amount of PRSI contributed by them and on their behalf and not to the number of contributions made or credited.
So an employee of Dunnes earning €10,000 a year would not get the same pension as a PAYE employee earning €50,000 a year.
Brendan
I will get back to you and explain when I get a chanceBut what has that got to do with Dunnes or the HSE?
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