In 1997, a total of 2,691 persons failed to qualify for the full rate old age contributory pension due to an insufficiency of contributions during their working lives. The majority of applicants were rejected on the basis of an insufficient yearly average number of contributions. However, 209 — 8 per cent — of these individuals may qualify for a reduced rate pension.
To qualify for the old age contributory pension, a person must have entered insurance at least ten years before pension age, have at least 156 contributions paid and have a yearly average of at least 20 contributions registered since January 1953, when the unified system of social insurance came into effect, or the time they started insurable employment, if later.
A new pro rata old age — contributory — pension was introduced with effect from 21 November 1997. The yearly average condition was reduced to ten contributions. A pro rata pension is payable depending on the yearly average number of contributions. To qualify a person with a yearly average of between ten and 19 must have 260 rather than 156 paid contributions.
While it is estimated that approximately 8,500 people will benefit immediately from the new provisions, some 1,300 persons will benefit every year thereafter. These will include categories such as women who have spent long periods outside the paid workforce and who do not benefit from the 1994 homemaker's provisions; returned emigrants who entered the workforce here for a short spell before working abroad for a long period and who then returned to take up employment here; and people who entered social insurance at an early stage and then became self-employed for a long period before the extension of social insurance to the self-employed in 1988.