Dáil Éireann debate -
Thursday, 22 Feb 1996

Vol. 462 No. 1

Written Answers. - Self-Employed PRSI Scheme.

Austin Deasy

Question:

23 Mr. Deasy asked the Minister for Social Welfare if he will carry out a review of the self-employed PRSI contribution scheme; the number of people who joined this scheme; the number of those who contributed but who will not receive any benefit or refund under this scheme; if he will grant a concession to allow a refund on the contributions paid in such cases; and if he will make a statement on the matter. [1217/96]

Minister for Social Welfare (Proinsias De Rossa)

Social insurance was extended to the self-employed in April 1988. Some 138,000 self-employed people are now registered with the Department.

While precise figures are difficult to calculate, it is estimated that up to 50,000 self-employed people may fail to qualify for an old age contributory pension because they were over 56 in 1988 — this is very much an upper limit estimate. Many of these people, however, are likely to qualify for an old age non-contributory pension which is payable subject to a means test. They are, of course, covered for survivor's and orphan's pensions.

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.

Self-employed people who were over 56 when social insurance was extended to the self-employed and who had been insured as employed contributors for any period prior to age 56 — depending on their total contribution record — 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 entitlement purposes. As these people first entered the social insurance system prior to age 56 they were not entitled to a refund of contributions in the event of failing to qualify for a pension.

As the Deputy will be aware, the legislation dealing with refunds of contributions has been under review in my Department.

As a result of this review it has been decided that, where a self-employed person was over age 56 in 1988, when social insurance for the self-employed was introduced, and whose only previous contributions were prior to 1953 — when the unified system of social insurance was first introduced — a refund of the old age pension portion of their self-employed contribution will be made to that person provided they do not qualify for an old age non-contributory pension. Approximately 400 people will be entitled to refunds which will be made by the end of this year.

In relation to those self-employed contributors who were over 56 years in 1988 and whose previous contributions include contributions after the unified system of social insurance was introduced in 1953, a decision in respect of refunds in their cases will not be made until full consideration has been given to the question ofpro-rata pensions.

The whole question ofpro-rata pensions falls to be considered both in the context of the recommendations contained in the final report of the National Pensions Board —Developing the National Pension System— and, in a budgetary context, also taking account of the overall future financing of pensions.