Helen Keogh
Question:7 Ms Keogh asked the Minister for Social Welfare if he intends to extend PRSI contributions to civil and public servants in the immediate future; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Application of PRSI.
Full social insurance cover will apply to all new public sector employees recruited on or after 6 April 1995. This will end the system whereby certain public servants were insured only for widows' and orphans' pensions and deserted wife's benefit and will close off a major gap in the coverage of the social insurance system. The Commission on Social Welfare recommended that public servants should be liable for the standard rate of PRSI and felt that this step would improve the sense of social solidarity within the social welfare system and facilitate the mobility of public servants both within the public sector and between the private and public sectors.
The Minister for Finance in his Budget Statement told the House that the new recruits will have full PRSI cover, and their occupational sick pay and pension schemes will be amended to take account of their entitlement to the full range of social welfare benefits. Staff interests will be fully consulted as regards the amended conditions of employment, which will be in accordance with the arrangements applicable to other groups of public servants — comprising a large proportion of the public sector workforce — who already have a class A PRSI status.
The Minister further told the House that following a comprehensive examination, and earlier consultations with the management of affected State companies, the Government has concluded that the application of full PRSI cover to all serving staff in modified public sector employments would not be justified. The move is in line with the recommendations of the National Pensions Board.
How many new civil servants will be recruited in the next year and what will the implications be in terms of PRSI payments? Has the Department undertaken an indepth examination of this matter and what are its views on extending PRSI payments to those already employed in the Civil Service? With greater life expectancy the number of old aged pensioners will increase substantially and there will be a greater requirement for pension provision. Is there any thinking on this matter or is it being ignored by the Department?
This matter has been considered for a number of years. As the pension system is developed everybody should be covered. Discussions on this question have taken place and as a result it is proposed that new entrants to the public service will pay full social insurance. Pro rata payments and other arrangements still apply to those working part-time in the Civil Service. These matters will be considered further in the context of the National Pension Board's report to see in what way people who are missing out on cover can be accommodated.
A decision has been taken to apply full social insurance cover to all new entrants to the public sector from 6 April 1995. This will have a substantial impact in the longer term in terms of ensuring a balance in pension provision. Most concerns about pension provision in, for example, the year 2032 will obviously be eliminated by the broader contribution base.
The Minister did not address my question. I am well aware of the position of new entrants. Has a definite decision been taken that, unlike new entrants, people already employed in the Civil Service will not have to pay the full amount? Is that a matter of policy?
The National Pensions Board recommended that the requirement to pay the full amount should not be extended to existing public servants. The Government has concluded that the application of full PRSI cover to all serving staff in modified public sector employments would not be justified.
That exhausts the time for priority questions. We will take Question No. 8 in the category of other questions.