Vol. 483 No. 4
42 Mrs. B. Moynihan-Cronin asked the Minister for Social, Community and Family Affairs his views on a pro-rata pension for the self-employed, such as farmers, who were obliged to pay reckonable contributions after their 56th birthday but who do not qualify for a contributory old age pension on reaching the age of 66 in spite of having 156 reckonable contributions paid and a yearly average of not less than 20 contributions paid or credited. [20547/97]
57 Mr. Durkan asked the Minister for Social, Community and Family Affairs whether he will give favourable consideration to the introduction of a pro-rata pension for persons with less than ten years self-employed contributions; and if he will make a statement on the matter. [20458/97]
I propose to take Questions Nos. 42 and 57 together.
The issue raised by the Deputies refers to the position of the self-employed over the age of 56 on the extension of social insurance to the self-employed in April 1988.
To qualify for the old age (contributory) pension, a person must, inter alia, 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 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 may be covered for widow's, widower's and orphan's pensions subject, of course, to satisfying the normal qualifying criteria.
However, the self-employed in that age group, who had been insured as employed contributors for any person 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 an old age (contributory) or non-contributory pension. In this year's Social Welfare Act provision was made for self employed contributors, who entered insurance in 1988 but were already over the age of 56 at that time, and, who had previously paid social insurance contributions as an employee, to receive a refund of the pensions element of their self employed social insurance, provided that they do not qualify for an old age (contributory) or non-contributory pension. Heretofore, their earlier contributions precluded them from receiving such a refund. I recently announced the introduction of a new pro-rata pension so that, in future, people who pay social insurance for a reasonable period of time will qualify for an old age (contributory) pension. From 21 November a yearly average of between 15 and 19 contributions will give a pension of 75 per cent of the maximum rate, while an average of between ten and 14 will give a pension of 50 per cent of the maximum rate. To qualify a person will also need to have a minimum of 260 paid contributions. This measure will be of benefit to many self-employed contributors.
