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Dáil Éireann debate -
Thursday, 3 Oct 1996

Vol. 469 No. 4

Written Answers. - Self-Employed Pensions.

Michael Creed

Question:

55 Mr. Creed asked the Minister for Social Welfare the current position regarding PRSI contributions by self-employed persons who reach retirement age without having ten years payment; whether these people are entitled to a reduced rate of contributory pension; whether they are entitled to purchase the shortfall in contributions; and whether they are entitled to a refund of their contributions. [17589/96]

To qualify for a contributory old age pension at age 66, a person is required to have been in insurable employment or insurable self-employment before reaching age 56. This has been a feature of the contributory pension scheme since it was first introduced for employed contributors in 1961 and expanded later to include self-employed contributors.

The purpose of this condition is to link entitlement to a pension to a reasonable level of social insurance contributions during the course of a person's working life. Accordingly, a self-employed person who enters social insurance for the first time after age 56 is not entitled to a contributory old age pension. Under existing legislation, it is not possible for such a person to qualify for a reduced rate of pension or to pay additional contributions to meet the shortfall in contributions. Where, however, the person had earlier insurance as an employed or voluntary contributor for any period before age 56, self-employment contributions may be combined with those earlier contributions for the purpose of assessing entitlement to pension.

In addition, contributions paid in an EU member state can be combined with contributions paid in Ireland to qualify for an old age contributory pension. Contributions paid in a country outside the EU, but with which Ireland has a bilateral social security agreement, can also be combined with those paid in Ireland to qualify for a special pension under the agreement. This latter situation arises only where the applicant does not have an underlying entitlement to a pension under existing social security legislation in either country.

Recently it was decided to refund the pension element to self-employed persons who had earlier insurance confined to the period prior to 1953 and who were over age 56 when insurance for the self-employed was brought in in 1988. Approximately 150 people qualified for these refunds the total cost of which was £120,000.

No refund is made at present to self-employed contributors in respect of employee contributions made after 1953 and before 1988. I am considering the question ofpro-rata pensions for such people and these contributions could be of value in that context.
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