Written Answers. - Social Welfare Benefits.
Éamon Ó CuívQuestion:
98 Éamon Ó Cuív asked the Minister for Social Welfare the consideration, if any, that has been given by his Department to enable people who were over 56 years of age when the self-employed social welfare contribution was introduced in 1988 to pay ten years contribution to entitle them to a contributory old-age pension ten years after paying their first self-employed social welfare contribution; and if he will make a statement on the matter. [17930/95]
Éamon Ó CuívQuestion:
99 Éamon Ó Cuív asked the Minister for Social Welfare the cost of allowing people who were over 56 years of age when the self-employed social insurance contribution came into being in 1988 to make up the ten year contribution requirement on reaching 66 years on a voluntary basis, thereby qualifying for a contributory old-age pension; and if he will make a statement on the matter. [17931/95]
It is proposed to take Questions Nos. 98 and 99 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 its introduction in 1961. The purpose of the condition is to link entitlement to a pension with a reasonable level of contributions to the social insurance fund during the course of a person's career. This condition applies to self-employed persons in the same way as it applies to all insured people. Accordingly, self-employed people, 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 would not qualify for the old age contributory pension. They are, of course, covered for survivors' and orphans' pensions.
However self-employed people 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 as such insurance can be combined with insurance as a self-employed contributor for old age pension purposes.
Refunds of the old age contributory pension element of the contribution may be made to those who entered insurance for the first time less than ten years before pension age and who fail to qualify for either old age contributory or non-contributory pension.
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. In this regard, costings done 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 need to be paid by self-employed contributors generally to finance such an extension would be 2.4 per cent over a 50-year period. Allowing self-employed persons to buy pension rights by paying the outstanding years contributions in order to qualify for an old age (contributory) pension would also be very costly to the Exchequer unless the payments made by the individual self-employed contributors were calculated on an actuarial basis. The cost to an individual contributor of buying rights on this basis would be prohibitive.
The National Pensions Board in its final report Developing the National Pension System puts forward,inter alia, a number of recommendations relating to eligibility for old age pensions, including proposals for a wider range of pro-rata pensions related to the average number of contributions over an insured's lifetime. However, it also recommended that the number of paid contributions to qualify for an old age (contributory) pension be increased from 156, three years, to 520, ten years, contributions. The report and its recommendations are being studied within my Department at present.
While I, in principle, favour apro-rata pensions approach, I have no plans to relax the requirement that a person must have entered insurance at least ten years before pension age.
100 Mr. J. Walsh asked the Minister for Social Welfare the plans, if any, he has to implement a recommendation of the National Pensions Board final report entitled Developing the National Pension System, that a wider range of pro-rata pensions related to the average number of contributions over an insured person's lifetime would be payable; and if he will make a statement on the matter. [17937/95]
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 recommended apro-rata pensions scheme which, in its view, would resolve the problems arising from gaps in coverage in a more comprehensive way.
It 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 with present arrangements, they have to be evaluated very carefully.
These proposals which relate to a wider range ofpro-rata pensions, require careful consideration before specific provisions are brought forward. Furthermore, the additional resources required would have to be examined in the context of the overall future funding of pensions. I am not yet, therefore, in a position to indicate precisely when these provisions are likely to be introduced.
101 Dr. O'Hanlon asked the Minister for Social Welfare the reason a person (details supplied) who is a blind contributory old-age pensioner cannot avail of companion travel similar to a non-contributory pensioner; and if he will correct this discriminatory anomaly. [17956/95]
In general, a companion free travel pass is available to certain categories of social welfare recipients who are incapacitated and unfit to travel alone. A companion free travel pass is only available to persons aged over 66 who are not wheelchair bound if they held a pass when they were under 66.
The person concerned, who is 75 years of age, is in receipt of a retirement pension from the Department and did not have a companion free travel pass when he was under 66. He is not wheelchair bound and, consequently, not eligible under the existing rules for a companion pass.
I am having this situation reviewed but any extension of the scheme to cover the category of person referred to will have to be considered in a budgetary context and in the light of available resources.