Social Insurance Fund will be broke in 3 years

[atlantic]

KN , mothergoose Hanafin doesn't seemed to be to worried.Oh but then again mothergoose,hasn't a clue about where money comes from.

The exchequer is in a BIG deficit and it has just been landed with another €1-2billion annual bill to pay. Thats about the size of it.

[NeilW]

It is a new bill for the exchequer and taxpayer. PRSI contributions have more than paid for benefits for well over a decade now. In fact the government took €500million out of the fund in 2001 and a further €350million this year out of its surplus and into the exchequer to pay for public spending. What is new is that the taxpayer will for for the first time since the early/mid 90's have to make up a deficit in its finances at probably €1-2billion a year. This is a new item of current spending that was previously self financing.

No, it is not new. We always had social insurance expenditure. There is no new expenditure. The expenditure was financed on a paygo basis so it was funded from current receipts not from some magic purse in the sky. What, pray tell, is the nature of this "new bill" you talk about? What money will have to be spent that was not spent before or would not have been spent if there was still a working balance in the fund?

[islands]

In fact the government took €500million out of the fund in 2001 and a further €350million this year out of its surplus and into the exchequer to pay for public spending.

Thanks Kerrynorth - I hadn't realised they raided it earlier. Did you get that from the budget speech, or how would someone find that?

[kerrynorth]

The revised estimates published today contain a lot of interesting figures re the SIF:

They are estimating the revenue from PRSI payments will be down €500million despite having increased the employee/self employed ceiling from €53k to €75k. They have clearly started to recognise that the economy is going to lose 150k+ jobs this year and that private sector incomes are falling rapidly. Although you have to wonder if a fall of €500million will be enough of an allowance;

They are expecting a deficit in the SIF for 2009 of €2.75billion;

And a year end carry over into 2010 of a €650million surplus.

Even accepting this scenario as correct this means that the SIF will run dry around March 2010 and the taxpayer will need to find an extra circa €2billion from somewhere to fund the 2010 SIF deficit - €2billion that the taxpayer just does not have nor money markets are likely to lend!