Vol. 456 No. 4
25 Mr. Killeen asked the Minister for Social Welfare the plans, if any, he has to abolish the averaging conditions in relation to contributions for pension qualification purposes and to replace them with a system based on the total number of contributions made or credited; and if he will make a statement on the matter. [13957/95]
To qualify for an old age contributory pension a person must have entered insurance at least ten years before reaching pension age, have at least 156 contributions paid and a yearly average of at least 20 contributions, or 24 in the case of a retirement pension, registered since January 1953 when the unified system of social insurance came into effect, or the time they started insurable employment if later.
The yearly average condition gives rise to particular problems for people with gaps in their insurance records. While a number of these problems have been addressed by my Department in recent years, the National Pensions Board, NPB, report Developing the National Pension System recommended a pro rata pension scheme, which, in its view, would resolve the problems arising from gaps in coverage in a more comprehensive way.
The NPB report recommended, inter alia, a wider range of pro rata pensions related to the average number of contributions over an insured's lifetime, where, for example, an average of 45 or over — as against 48 at present — would qualify a person for the maximum rate of pension, while a minimum 30 per cent of full rate pension would be payable for an average of ten to 14 contributions. It also recommended that the number of paid contributions to qualify for retirement and old age contributory pension be increased from 156, three years, to 520 contributions, ten years. As such proposals could lead to a reduction in entitlement for future pensioners, when compared to current arrangements, they have to be evaluated very carefully.
The NPB report, which is both comprehensive and complex, is at present being studied in detail within my Department. I will bring forward proposals on the issues addressed in the report based on these detailed considerations and in the light of available resources.
