Dáil Éireann debate -
Tuesday, 24 Mar 1992

Vol. 417 No. 5

Written Answers. - RSI Scheme for Self Employed.

Terry Leyden

Question:

423 Mr. Leyden asked the Minister for Social Welfare if he will outline the number of persons who have availed of the RSI scheme for the self employed and the number of farmers who are in this scheme; if he has any proposals to amend the scheme to allow those over 56 years of age to avail of the old age contributory pension benefit at 66 years of age; if he will give details of, (a) the total contributions to date, (b) the minimum contributions, (c) the benefits of the scheme and (d) the commencement date for payment of first contributory pensions under the scheme; and if he has any proposals to extend benefits to disability, invalidity and other benefit schemes.

Minister for Social Welfare (Mr. McCreevy)

Social insurance cover for old age and widow's pensions was extended to self-employed persons with effect from 6 April 1988. The latest figures available relate to the contribution year 1989-90. In that year some 125,000 self-employed persons paid social insurance contributions at the class S rate. The information requested by the Deputy concerning the number of farmers in this category is not available.

The benefits payable under Class S are widow's contributory pension, orphan's contributory allowance and old age contributory pension. Entitlement to widow's (contributory) pension can arise after the payment of three years contributions.

In relation to old age contributory pension, those self-employed persons who became insured for the first time when social insurance for the self employed was introduced in 1988 and who reach pensionable age (66 years) on or after April 1998 will qualify, subject to the normal conditions. Self-employed contributors who had been insured as employed contributors prior to becoming self employed can combine their earlier insurance to qualify for pension.

Providing entitlement to old age (contributory) pension to self-employed persons who, being over 56, enter social insurance for the first time in 1988 and who would have less than ten years contributions registered before pension age would have major cost implications. The extra rate of contribution which would be required from self-employed contributions to provide old age contributory pensions to all self-employed contributors aged between 56 and 66 in April 1988 is estimated at 2.4 per cent over a 50 year period.

The total contribution income received from self-employed contributions for each year since its introduction is as follows.

Year		*Minimum contribution
	£000's	£
1988	21,792	208
1989	46,383	208
1990	52,379	208
1991	57,881	234

*These are distinct from the special minimum flat rate of contribution payable by self-employed persons who are not required to submit returns of income to the Revenue Commissioners. This rate was originally fixed at £104 per annum and was increased to £116 on 6 April 1991.

The question of extending coverage for short term benefits such as disability and other benefits will be considered in the light of the experience of the scheme and the need for cover for such benefits for the self-employed persons.

The question of providing cover for invalidity pensions to the self-employed group is currently being examined by the National Pensions Board in the context of its final report on a national pensions system. I expect to receive the board's recommendations in the near future.