Vol. 389 No. 3
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Dáil Éireann debate - Thursday, 27 Apr 1989
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Written Answers. - Insurance Statistics-Records.
asked the Minister for Social Welfare the estimated number of people who did not re-enter insurable employment at the full rate of social insurance in 1974; and the estimated cost of extending entitlement of pro rata old age contributory pension, to these people.
43.
asked the Minister for Social Welfare, in respect of persons with mixed insurance records between 1953 and 1974, the estimated number of persons involved and the estimated cost of giving them old age contributory pensions pro rata to the number of contributions made; the main categories of persons involved; the State companies or State agencies involved or, where applicable, the average sector employment involved; and if he will make a statement on the matter.
I propose to take Questions Nos. 17 and 43 together.
People who came into full rate social insurance cover in April 1974 when the social insurance income limit was abolished were covered for old age (contributory) pension from that date. When they reached pensionable age and provided they had no previous insurance, their contributions average for pension purposes was calculated from 1974. On the other hand, people who came back into full insurance in 1974 having been previously insured had their contributions average calculated from their original date of entry and because of gaps in their insurance prior to 1974 many of these failed to meet the average test requirements for old age (contributory) pension. The arrangements which I made last year were designed to provide pro-rata pensions for the people concerned who had averages of less than 20 contributions and to remedy their position vis-à-vis that of other people who came into full insurance in 1974.
These arrangements were intended for this specific group of people whose position was anomalous in that they were compulsorily insured for pension from 1974 but were precluded from qualifying for pension through having contributed previously. To extend similar arrangements to other categories of persons whose contributions' average is below the present minimum of 20 contributions would have considerable financial implications.
Persons whose contributions average is low because of a mixture of full and modified insurance are one such category. These would be mainly public servants who were promoted into a permanent and pensionable grade insurable at a modified rate, having been previously fully insured, or people who enter such a grade from fully insurable employment in the private sector. These people would, however, in due course qualify for an occupational pension based on their pensionable service.
Mixed insurance of this kind is an ongoing feature of the social insurance system and can result in a person not having sufficient insurance at the full rate to qualify for pension. The abolition of the income limit in 1974 has no particular significance as far as this issue is concerned and to make special arrangements for one particular group of people with mixed insurance without addressing the broader question of mixed insurance generally would merely create other anomalies and would not be justified.
The contribution conditions generally for pensions, including the average condition, and the question of mixed insurances in particular, are among the issues which will be specifically addressed by the National Pensions Board in their forthcoming report on pensions generally. I propose to examine possible solutions to these issues in the context of the board's report.
There are no firm data available as to the numbers of persons who did not re-enter insurable employment at the full rate in 1974, including those with mixed insurance between 1953 and 1974, and who would qualify for pro-rata pension if the average requirement were altered. The number involved, however, is likely to be substantial.
