From January 2013, the Employee’s PRSI-Free Allowance of €127 per week (for those paying PRSI Class A, E and H) and €26 per week (for those paying PRSI Class B, C and D) will be abolished.
Employees who earn €352 or less per week continue to have no liability to make a PRSI contribution and are not affected by the abolition of the weekly PRSI-Free Allowance.
Currently, employees who pay PRSI at Classes B, C and D (a minority of the civil and public sector) are exempt from PRSI in respect of self-employed earned income (from a profession or trade) and any other unearned income e.g. rental income. This exemption will be abolished from next year and all such income will become liable to PRSI at the rate of 4%.
In the following year (2014), the exemption from PRSI applying to all employees with unearned income only, will be abolished. Also, from next year, the minimum annual PRSI contribution for people with annual self-employed income over €5,000 will increase from €253 per annum to €500 per annum.