Varadkar: "We need to cut tax but increase social insurance to get a fair society"

Discussion in 'Economic issues' started by Brendan Burgess, Apr 19, 2017.

  1. Purple

    Purple Frequent Poster

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    They should just reinstate the PRSI ceiling that was there until some time around 2001/2002.
    I found this when I was looking for the date it was abolished. They were warning that the marginal tax rate would increase to 46.5%. It's now 52% and if you are a company director or self employed it's nearly 60%!
     
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  2. newtothis

    newtothis Frequent Poster

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    Isn't that what a private pension provides? Apart from that, I don't think retirement benefits should be considered as insurance at all. Clearly, what's there is a mess all round (unless someone wants to argue the opposite?).

    Personally, I think the insurance aspects (e.g. payments for periods when someone cannot work due to sickness or unemployment or need to care for someone or whatever) should be separated out from retirement benefits, on the basis they are things that may or may not happen. Like any insurance, ultimately it would be the people who don't need it who pay for those who do. The real question is how retirement benefits should be structured. It's hardly a form of insurance, given it's almost certain to happen given life expectancy currently, but if it is just a government managed savings fund on behalf of individuals, how are those who couldn't work (due to disability or need to care for someone) be included? or would they just be told, "sorry, there's nothing in your particular pot?". I say "government managed" as experience shows that leaving it to the private sector just allows providers to soak up large guaranteed incomes with all risk on the customer side.
     
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  3. Purple

    Purple Frequent Poster

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    I think it's crazy that someone pays into a State pension fund all their life and then gets the same as someone who sat on their ass, claiming welfare, and never worked a day in their life.
    We need to stop punishing people for hard work and incentivising other people to live off their neighbours.
     
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  4. jjm

    jjm Frequent Poster

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    PRSI Class A1 up untill USC came in was Unfair .Other groups who now have to shoulder the burden through USC are getting out of it. Varadker needs to be faced down by the people who were paying the higher prsi all of there life.The 4% that was taken off when the USC came in needs to be explained. Varadker making people who paid 8% prsi A1 stamp all of there life who have to retire at 65 go on benefit untill they reach 66 he should be ashamed of himself,
     
    Last edited: Apr 20, 2017
  5. Sophrosyne

    Sophrosyne Frequent Poster

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    Agreed.

    The Social Insurance Fund is dealing with chalk and cheese.
     
  6. Sarenco

    Sarenco Frequent Poster

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    Well, there's obviously huge uncertainty how much an individual will draw down in retirement benefits. It is definitely a form of insurance - against longevity.

    I strongly agree with Brendan that there should be some connection between contributions and benefits.
     
  7. jjm

    jjm Frequent Poster

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    The connection between contributions and Benefits should start by pushing Varadker to start returning the cutbacks made around 2008 to the people who paid very high PRSI.Can anyone explain what the 4% extra PRSI Class A1 was used for before the usc came in,
     
    Last edited: Apr 20, 2017
  8. Sophrosyne

    Sophrosyne Frequent Poster

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    How would link this work?

    Would it apply to all welfare benefits?

    Would there be maximum and minimum contributions and benefits caps?
     
  9. Gordon Gekko

    Gordon Gekko Frequent Poster

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    Why do you keep ranting and raving about a PRSI rate that did not exist?
     
  10. Protocol

    Protocol Frequent Poster

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    I am losing my patience here. This is the last time I will tell you.

    Since 2003, the main rate of ee PRSI has been 4%. Please, please, stop making up statements that it was higher.

    There was also a 2% Health Levy, which was a tax. Let me repeat that, it was a tax.

    It was an earmarked tax, used to finance healthcare.

    It was incorporated into PRSI on payslips, that's maybe why you think you were paying more than 4% PRSI.

    It was not a separate line on payslips.

    It was increased to 4%/5%, and the Income levy was introduced. Again, these were both taxes.

    The Health and Income levies were replaced by the USC tax.
     
  11. jjm

    jjm Frequent Poster

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    Gordon Gekko/ Protocol
    Can you explain why it only affected the people on PRSI Class A1 when you Get a chance.Protocol Your own link for2010 PRSI Class A1 showed 8% Can you explain Please That is the rate I paid.
     
    Last edited: Apr 21, 2017
  12. Protocol

    Protocol Frequent Poster

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    Why what only affected people on class a1?
     
  13. jjm

    jjm Frequent Poster

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    Just look at your link and you will see for yourself.I have checked out your link it includes the total for each group Class A1 is the only one who had to pay extra untill the USC came in .If you look you will see Class A1 is the only class that changed it was 8% in 2010 it went down to 4% in 2011 when the USC came in,There are no extra Hidden charges once the USC came in.All other Groups had no Hidden extra charges so there rates did not chenge ,The now have to pay the USC in other words they now pay extra making it a more lever playing field,
     
    Last edited: Apr 21, 2017
  14. Protocol

    Protocol Frequent Poster

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    You are de-railing this thread, but I will answer you.

    I think I understand what you are getting at now, at long last.

    Let's take 2010 as an example.

    http://www.welfare.ie/en/downloads/sw14_10.pdf

    Low paid workers are in PRSI classes AO and AX.

    AO was 38-352 pw - these people were exempt from PRSI

    They did not have to pay PRSI at all, yet they receive a credit, so they get future benefits.

    This continues to 2017, there is a PRSI exemption for low-paid workers.

    After 352 pw, workers were in class AX or AL, and they paid 4% PRSI.

    Then, at 500pw, workers were in class A1, and the 4% Health Levy kicked in.

    So people in class A1, like you and me, earning over 500pw in 2010, paid 4% PRSI and the Health Levy, which was typically 2%, but which was 4% in 2010.
     
  15. Protocol

    Protocol Frequent Poster

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    What you seem to be getting at is that the USC was broader than the Health and Income levies that it replaced.

    That is true.
     
  16. jjm

    jjm Frequent Poster

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    Last edited: Apr 21, 2017
    Protocol.
    Check how much PRSI you paid in 2010 include everything
    Check how much PRSI you paid in 2011
    Having checked both years now do the sums and cross check and post results.for 2010/2011 use 50000 euro for both years.
    I think PRSI for 2010 on 50000 euro comes to around 7.47% or 3735.76 euro but I will let you correct me .you are correct All of these extra charges were loaded on to the backs of 600000 to 700000 thousand workers until the USC came in.
     
    Last edited: Apr 21, 2017
  17. cremeegg

    cremeegg Frequent Poster

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    SW payments that a person receives due to their PRSI contributions are called benefits, Jobseekers Benefit for example.

    SW payments that a person receives based on a means test are called allowances, Jobseekers allowance, for example.

    In the past there was a different rate for the two, benefit rates were higher than allowance rates. However they have in recent years been brought into line. I don't know what democratic approval there was for this change in policy.

    Under certain circumstances it can be more difficult for a person who has paid PRSI to secure Benefits than it is for a person who has not paid PRSI to get Allowances. I'm thinking of the self employed.


    That really isn't the nature of insurance. Every one who pays a premium is insured. I can drive my car tomorrow safe in the knowledge that if I cause an accident I will be able to claim any cost on my insurance. The benefit i receive, peace of mind if you will, insurance cover legally, is the same wether I cause an accident or not. It isn't the healthy who pay for the sick. Every one pays for the insurance cover.
     
  18. newtothis

    newtothis Frequent Poster

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    OK, fair enough, though I did say "at a very basic level". What I was trying to capture was the notion that the premiums of everyone, especially the ones who don't make claims, fund the claims. If you strip out the ones who never make claims (as in the Paul Ryan example) the whole thing collapses due to unaffordability: it becomes just a glorified savings scheme, and woe betide anyone who needs to claim more than they paid in. Insurance relies on the fact that the number of people making claims is much lower than the total number of people making payments. So, to refine what I said, it's not that the healthy who pay for the sick it's the fact that the healthy are there making their contributions that helps enable the sick to be paid.
     
  19. Sophrosyne

    Sophrosyne Frequent Poster

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    Last edited: Apr 22, 2017
    Some may liken PRSI to a form of insurance, but it is not personal insurance.

    To use your analogy, Cremeegg, it would be more like having to pay for motor insurance even if one did not drive.

    Because of their personal circumstances and health, certain PRSI contributors in all of the income groups are greater beneficiaries of welfare than others.

    Therefore, linking all welfare payments to contributions would be problematic as usage of other benefits would decrease pension benefits.

    It might however be feasible for Old Age Pensions.
     
    Last edited: Apr 22, 2017
  20. jjm

    jjm Frequent Poster

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    Gorton
    Responding to your post 29
    Let me be absolutely clear on this ,PRSI Claas 1,Some posters are given Distorted conclusions on the Prsi amount taken from workers in the private sector and workers in the public service after april 6 1995 pay before the USC in 2011
    Facts Since 2011 PRSI A1 Employer stops total of 4%
    ( I have shown In post no 36) 2010 A person on 50000 euro would have paid 3735 euro total of 7.47% of there gross wage 4% was taken and put into the PRSI Fund another 3.47% was taken from anyone paying PRSI Class A1(USC FOR PRSI A1 only)
    (No other group paying PRSI got the extra 3.47% taken from there gross wage)
    I have gone back and checked and the amount taken from PRSI Class A1 was always around 6 or7%.To give you an example take our good friend proctocol for instance lets say he started in the public service in 1995 this was the year that the changed people starting in the public service from D stamp to PRSI Class A1. A D stamp was 1.96% and the new PRSI stamp was around 7% at that time.So if protocol started after 6 April he got 5% extra pay to allow for the extra PRSI he had to pay meaning that the PRSI stamp had to be around 7%( 1.96 + 5% total 7% Source Google and you will find it.(Gorton The Total Amount Taken is what you are missing the rest is fake news)In other words Employers stop around 6 or 7% .The Trioka are gone and Varadker would like do away with the USC for his pals and put it back on top of the people paying PRSI Class A1 same as before.This dead cat smells,It is no wonder people think the should not have to pay for any services Valadker should now start paying extra to the people who paid an extra few % along with there PRSI starting straight away.When the USC came in for everyone it took in over 2 billion this gives you an idea how much extra PRSI Class A1 were paying from there gross wages over everyone else all of there working life.This is not a rant it is facts Leo and his mates should acknowledge.
     
    Last edited: Apr 24, 2017