Social Welfare Implications for Company Directors

[tony79]

PRSI CLASS
If you own less than 15% of the company, then you are on PRSI Class A and will be entitled to the same benefits as employees.

Class A Benefits
* Jobseeker's Benefit
* Illness Benefit
* Health and Safety Benefit
* Invalidity Pension
* State Pension (Transition)
* Treatment Benefit
* Occupational Injuries Benefits
* Carer's Benefit

* Widow's or Widower's (Contributory) Pension
* Guardian's Payment (Contributory)
* State Pension (Contributory)
* Maternity Benefit
* Adoptive Benefit
* Bereavement Grant

If you own greater than 15% of the company, then you are a Proprietary Director and are on PRSI Class S. This will cost the company less in employer PRSI contributions, however you are not entitled to the same benefits as employees on PRSI Class A;

Class S Benefits
* Widow's or Widower's (Contributory) Pension
* Guardian's Payment (Contributory)
* State Pension (Contributory)
* Maternity Benefit
* Adoptive Benefit
* Bereavement Grant

REDUNDANCY
If you pay PRSI Class S then you are not entitled to a redundancy payment, but the company can pay you a termination payment which can be tax free.

UNEMPLOYMENT
If you are on PRSI Class A and have made sufficient contributions then you can apply for Jobseekers Benefit.

If you are on PRSI Class S, you are not entitled to Jobseekers Benefit as you have not been making PRSI Class A contributions.You can apply for Jobseekers Allowance which is means tested.



I would appreciate if anyone has any comments on the above, as it represents what I have been able to find out from my own research but I am open to clarification on any item.

Also, I would appreciate any additional aspects anyone feels should be added as a resource for company directors.

 

[tony79]

From speaking with the Scope Section at the Department of Social and Family Affairs (01 7043000), it would appear that a director who owns

over 50% has to be on Class S

under 50% can be on Class A or S


The advantage of Class S is that the company pays no Employers PRSI.
The disadvantage of Class S is that the director has reduced social welfare benefits.

So a director on Class S should make sure that he gets the benefit of the reduced PRSI Contributions for the employer by fully claiming expenses etc., otherwise it would be better for the director to remain on Class A where they are protected by FULL social welfare benefits at the expense of the company.