asked the Minister for Social Welfare the proposals, if any, he has to amend the inherent inequity governing the averaging of social welfare contributions for the determination of entitlement to the old age contributory pension; and if he will make a statement on the matter.
Written Answers. - Old Age Contributory Pension.
47.
One of the conditions for entitlement to old age contributory pension requires a person to have a yearly average of at least 20 contributions from 1953 or from the year of entry into insurance under the Social Welfare Acts, whichever is the later, up to the end of the last contribution year before reaching 66 years of age.
The old age contributory pension is paid to pensioners out of the social insurance fund to which insured persons and their employers contribute through the PRSI system. The social welfare insurance schemes are operated on a pay-as-you-go basis and it is considered a reasonable requirement that a person should have a minimum average number of contributions over his working life in order to qualify for a pension.
In some cases people may not enter insurance until later in life and, because their average is calculated from their date of entry, they may qualify for pension on the basis of a relatively short number of years of contributions. On the other hand some persons who entered insurance earlier but who have gaps in their record which are not filled by voluntary contributions may fail to qualify for pension because of the averaging condition. In some cases such gaps may have arisen because of the operation of the remuneration limit for social insurance which operated up to 1974. The provision of special arrangements for people in this situation would have significant financial implications.
The general question of the averaging of contributions for pension purposes is being addressed by the National Pensions Board which will be reporting to me on the question of a national pension plan in due course. Any proposals which the board may make for changes in the present contribution conditions will be fully considered.