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Dáil Éireann debate -
Thursday, 17 Oct 1991

Vol. 411 No. 2

Written Answers. - Social Welfare Benefits.

Tomás MacGiolla

Question:

30 Tomás Mac Giolla asked the Minister for Social Welfare if the examination of the weekly rate of fuel allowance for low income households in areas where the burning of bituminous coal has been banned, which he indicated in Dáil Éireann on 10 July 1991 was under way, has yet been completed; the rate which will be paid this winter; when it will come into operation; and if he will make a statement on the matter.

A review of all aspects of the ban on bituminous coal in the Dublin area was undertaken in July last by the Department of the Environment in consultation with my Department. It concluded that an increase in the rate of the weekly fuel allowance was not warranted for the 1991-92 heating season.

The new heating season commenced on Monday 14 October last. The amount of the smokeless fuel allowance remains at £3 per week and the conditions for receiving the allowance are the same as last season. The rate of allowance was set having regard to the increased costs to households arising from the ban on the sale of bituminous coal in the greater Dublin area in 1990.

I am satisfied that the measures introduced for the new heating season will assist the households concerned in meeting the additional costs involved during the new season.

John Browne

Question:

31 Mr. Browne (Carlow/Kilkenny) asked the Minister for Social Welfare the number of women receiving the unmarried mother's allowance in (a) 1981 and (b) 1991.

The information requested by the Deputy is as follows.

In 1981, there were 6,200 women in receipt of an unmarried mother's allowance. In 1990, the unmarried mother's allowance was incorporated into the lone parent's allowance scheme. In September 1991, there were 28,800 families in receipt of this new allowance which caters for all lone parents who are bringing up children on their own.

Bernard J. Durkan

Question:

32 Mr. Durkan asked the Minister for Social Welfare whether he intends to allow contributory pension rights to persons on foot of contributions made prior to 1953 and in conjunction with further contributions under the 1988 Act with a view to eliminating the anomaly which exists at present whereby such persons receive no pension benefits whatever; and if he will make a statement on the matter.

P. J. Sheehan

Question:

35 Mr. Sheehan asked the Minister for Social Welfare if his attention has been drawn to the anomaly that exists in the Social Welfare Act, whereby self-employed people, including farmers, are compelled to pay PRSI contributions and will not qualify for old age contributory pension at the age of 65 years unless they have ten years contributions paid prior to attaining that age; and if he will now consider allowing people who enter that category, between the age of 55 years and 65 years an opportunity of paying their arrears of contributions from 55 years onwards to enable then to qualify for their old age contributory pension at the age of 65 years.

I propose to take Questions Nos. 32 and 35 together.

To qualify for the old age contributory pension a person must have entered insurance at least ten years before pension age. This condition has been a feature of the scheme since it was introduced in 1961. The purpose of the condition is to ensure that entitlement to the pension is limited to those who have made a reasonable level of contributions to the Social Insurance Fund during the course of their careers. This condition applies to self-employed persons, including farmers, in the same way as it applies to all insured people. Accordingly, self employed persons who became insured for the first time when social insurance was extended to the self employed in 1988 and who were then aged 56 or over will not qualify for the old age contributory pension. However, self-employed persons in that age group who had been insured as employed contributors for any period prior to age 56 could qualify for the old age contributory pension. Such insurance can be combined with insurance as a self-employed contributor for old age pension purposes.
It should be noted that these social insurance contributions payable by the self-employed also give cover for widows contributory pensions to which entitlement can arise after three years insurance. The self-employed have been paying contributions for three years since the end of March this year.
Detailed consideration has been given by my Department to the possibility of providing for entitlement to the old age contributory pension to persons who entered insurance for the first time as self employed contributors less than ten years before pension age. A number of possible options were considered including that of giving those affected the option of purchasing the extra number of years required. However, it was found that the net cost would be prohibitive and financing it would be a major burden on those contributing. In this regard, costings made in 1989 estimated that the net cost of paying old age contributory pensions to all self employed contributors who were aged between 56 and 66 in April 1988 would amount to £756 million over the lifetime of the persons concerned. The extra rate of contribution which would have to be paid by self employed contributors to finance such extension would be 2.4 per cent over a 50 year period.
Refunds of the old age pension element of the contribution may be made to those who entered insurance less than ten years before pension age and who fail to qualify for either old age contributory or non-contributory pension. This includes provision for the payment of interest on such refunds due after 1 November 1990. The rate of interest is equal to the increase in the consumer price index for each full calendar year after the date the contributions have been made.
The Government have also given a commitment in theProgramme for Economic and Social Progress to examine the possibility, in the context of structural reform in agriculture, of an arrangement whereby farmers in the older age groups selling, leasing or transferring their farms will be provided with a retirement incentive related to means. In this same context of structural reform, the interaction with the position of farmers aged 56 and over who pay PRSI contributions but who will not qualify for a contributory pension will be considered.
As Deputies will be aware, one of the conditions for entitlement to old age contributory pension is that a person must have a yearly average of at least 20 contributions since 1953 when the unified system of social insurance came into effect or since the date he/she entered into insurance, if later. It is relevant to point out that prior to 1953 three different types of contributions were payable. These were — national health insurance, widows and orphans pensions and unemployment insurance contributions. Such contributions did not include an element in respect of old age (contributory) pension. The present contribution conditions for entitlement to pensions are being examined by the National Pensions Board. They will be reporting on this and other issues in their final report which is expected before the end of the year. The matter will then be considered further in this context.

Nora Owen

Question:

33 Mrs. Owen asked the Minister for Social Welfare when was the last time income limits were reviewed regarding the payment of maternity benefit; if his attention has been drawn to the fact that women earning in excess of £11,000 per annum cannot claim the maternity benefit equivalent to their salary; and if he will make a statement on the matter.

Under the maternity allowance scheme for women in employment the rate of payment is 70 per cent of a woman's reckonable weekly earnings in the relevant income tax year, subject to a minimum payment of £76 and a maximum payment of £154 per week. The maximum payment is paid when the woman's earnings are £11,000 or more. Since the introduction of the scheme, the upper earnings limit has been the same as that applying to pay-related benefits generally. The income ceiling for all pay-related benefits, including maternity allowance, has remained at £11,000 since April 1983. Given the financial constraints in recent years the general policy has been to target increases towards those on lowest payments, rather than increase pay-related benefits. I will continue to keep the situation under review and will consider any possible increase in the ceiling in the context of the budget, and in the light of possible developments at EC level.

Toddy O'Sullivan

Question:

36 Mr. T. O'Sullivan asked the Minister for Social Welfare if he will introduce equality in the area of pension entitlements between men and women who are currently covered by occupational pensions.

Part VII of the Pensions Act 1990 which I introduced last year requires occupational pension schemes to apply the principle of equal treatment to men and women. The Act requires an end to discrimination, both direct and indirect, in the scope of conditions of access to schemes, benefit rights and contribution levels. This part of the Act will come into operation on a date to be prescribed.

Before bringing this Part of the Act into operation I am considering the implications of certain relevant developments at EC level, in particular the judgment of the European Court of Justice in the case of Barber -v- Guardian Royal Exchange Assurance Group.
In January last I sought the advice of the new pensions board on the implications of this judgment for the implementation of Part VII of the Pensions Act. I have recently received the board's report on this matter. It is my intention to bring forward regulations shortly to implement the equal treatment requirements of the Pensions Act.

John Browne

Question:

38 Mr. Browne (Carlow/Kilkenny) asked the Minister for Social Welfare if he will standardise the cost of board and lodgings in the assessment of means in claims for various allowances.

The value to a claimant of free board and lodgings occurs, in the main, in the assessment of the benefit accruing to a young person living at home and claiming unemployment assistance. It covers the value of accommodation, meals, support and maintenance as well as generally sharing in the standard of living of the household and the facilities which the household enjoys. Because the value of free board and lodgings depends on the household circumstances the amount of the assessment varies. The assessment achieves a degree of equity as between applicants in different household circumstances. Standardising the value of board and lodgings in the assessment would be contrary to this.

In this year's budget I introduced a minimum weekly payment of £5 for unemployment assistance claimants whose current entitlement is less than £5 and whose only means is the yearly value of free board and lodgings at home.

The operation of the means test ensures that assistance is targeted at those who are most in need and is an equitable way of directing limited resources. To standardise the value of free board and lodgings in the assessment of means would have major financial implications.

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