Vol. 419 No. 2
13 Mr. Durkan asked the Minister for Social Welfare if he will give details of the categories and numbers of persons in respect of which pro rata old age contributory pensions are currently available; if he intends to extend this facility; and if he will make a statement on the matter.
The rate of old age contributory pension payable to any person is related to the average of contributions paid or credited over his insured lifetime. Where the average is 48 or more, full pension is paid. Reduced pensions are paid for averages below 48, down to a minimum of 20.
The 1988 Social Welfare Act made provision for the payment of pro rata pensions for averages below 20 in the case of certain people who were brought back into compulsory insurance in 1974 when the upper earnings limit for social insurance was abolished. These were people who had a record of insurance after 1974 but failed to qualify for old age contributory pension because their insurance record prior to 1974 was intermittent due to the operation of the limit. The number of people in receipt of these pro rata pensions under this arrangement at the end of March 1992 was 133.
The Social Welfare Act, 1991 made provision for the payment of pro rata pensions for averages below 20 in the case of people who have “mixed” insurance, that is a mixture of full rate and modified rate insurance and whose average of full rate insurance was inadequate to qualify for a pension. Under regulations introduced in November 1991 a pro rata pension is payable to such people in proportion to the periods of insurance completed at the rate appropriate for old age contributory pension purposes. The number of people receiving payment of a mixed insurance pro-rata old age contributory pension at the end of March 1992 was 184.
Under the EC regulations on social security for migrant workers, pro rata pensions are payable where a person does not satisfy the conditions for receipt of old age contributory pension by virtue of Irish social insurance alone and who has been insured in another member state. Under the regulations the Irish and EC contributions are combined to satisfy the contribution conditions and an Irish pro rata pension is then payable. The number of people in receipt of a pro rata old age contributory EC pension at the end of March 1992 was 3,397.
As the Deputy will be aware, the whole area of conditions for entitlement to pensions is being examined at present by the National Pensions Board in the context of their final report on the future development of pensions. The question of extending further the facility of pro rata pensions will need to be considered in the light of the board's recommendations in this area. I expect to receive the board's report shortly.
Since there are quite a number of people with an average of between 15 and 20 contributions, will the Minister take into account the contributions those people made prior to 1953? That year is the cut-off point that causes a problem for a number of these people who, if they could take into account contributions made before that, would find their average increased well beyond 20.
It would be as well to await the report of the National Pensions Board. If there is one Deputy in this House who over a long number of years has made a good case for pro rata pensions, etc., and brought it to the attention not only of myself but of various Ministers, it is Deputy Durkan. The final report from the National Pensions Board should be received shortly. It is possible that they will go down the road on pro-rata pension but let us remember, as I pointed out before, if we had a strict pro rata pension base many people's rate of pension would go down. To get the maximum rate of contributory pension one must have 48 contributions. If the average is only about 20 it is about £5 a week less while the person with 19 gets none at all. We have made some changes over the years. If we operated a strict pro rata basis many people's pensions would come down and I do not think that would be acceptable either. If the pro rata basis had been applied all along I would not see any difficulty with Deputy Durkan's solution. I am afraid I cannot go into that now but I will await the report which I understand I will see soon, and then I will consider it further.
The matters the Deputy raised in relation to "mixed" insurance have been alleviated through various Acts. Hopefully this is the last area where there is trouble and we will be able to find a way out of that.
Is the Minister aware that effectively people on pensions as per the 1953 date of retirement can very often have smaller pensions than those who are on a non-contributory pension who paid nothing into the system?
There are many anomalies. A person who has worked and has more insurance contributions over the years may not qualify because he does not have an average of 20 and will not get any pension at all, whereas another person who entered into insurance later in life will be able to qualify. Nobody could defend that but it is an area that is very complex and costly and hopefully we will be able to solve it.
When will the report be available?
It will be available within the next two months.
That disposes of questions for today.
