One of the commitments made prior to the 1997 general election was to address the issue of people who narrowly failed to qualify for a pension. The group referred to by the Deputy were marginally excluded from entitlement to an old age (contributory) pension as they were aged 56 or over when compulsory social insurance was extended to the self-employed in April 1988. These people could not, therefore, satisfy the governing qualifying condition of having entered insurance at least ten years before pension age.
In delivering our commitment, I examined various options in arriving at a formula that would address the specific problem faced by this group of pensioners. Of these I considered that a flat-rate payment of a special old age (contributory) pension was the most equitable and practical way of addressing the situation, taking account of all the circumstances. It represents very good value for money for all the people concerned.
Accordingly, new arrangements now apply for those self-employed who were aged 56 or over in April 1988 and who have, at least, five years reckonable contributions paid since then. As the Deputy has pointed out, payment will be made at a flat rate of 50 per cent of the standard maximum rate with equivalent increases for adult and child dependants, where applicable.
Entitlement to the pension will be created from 9 April 1999. However, to carry out the necessary examination of claims and to ensure that refunds of contributions already made are recouped, claims will actually be put into payment from 15 October 1999. Arrears of payment from April to October, where due, will be paid at that stage. Title will also give access to the free schemes, where appropriate.
It is, I believe, important to stress that this special arrangement represents a positive and reasonable response to the situation in which this group of people found themselves. The rationale behind the five year paid contribution condition is to ensure that entitlement to a pension is limited to those who have made some reasonable level of contributions to the social insurance fund during the course of their careers. I consider this threshold to be eminently fair, reflecting as it does a certain consistency of commitment to the social insurance fund over a given period of time.
In relation to the case raised by the Deputy, it appears, according to the records of my Department, that he will qualify under the new arrangements. Accordingly, the pension services office will be in touch with him directly to formally confirm his entitlement.
