The same qualifying conditions for the old age contributory pension apply to all insured people, both employees and self-employed. These qualifying conditions require a person to fulfil the following three criteria. First, the person must have entered social insurance at least ten years before reaching pensionable age, which is 66. Second, the person must have a minimum of 156 contributions paid. In line with the recommendations of the Pensions Board, this requirement will increase to 260 and 520 paid contributions from April 2002 and April 2012, respectively. Third, the person must have a yearly average of at least ten contributions paid or credited from 1953, when the unified system of social insurance came into effect, or the date of entry into social insurance, if later, and at least 260 contributions paid. The reduction in the yearly average requirement from 20 to ten contributions was introduced in November 1997, leading to a pro rata old age contributory pension. Where a person has a yearly average of between ten to 14 contributions, he/she is entitled to a pension rate at 50% of the standard maximum rate while those with averages of between 15 to 19 receive a pension rate equivalent to 75% of the standard maximum rate.
Alternatively, where a person fails to satisfy the second and third qualifying conditions set out above, he or she may qualify for a mixed insurance pro rata pension if a mixture of full rate and modified rate social insurance contributions have been paid.
The pension arrangements to which the Deputy refers were introduced last April, in line with the Government's commitment to extend contributory pensions coverage to people who narrowly failed to qualify for a pension. These relate to a specific group of people, namely, self-employed people who were 56 years of age or over in April 1988, when social insurance was extended to the self-employed, and who, through no fault of their own, could not qualify for a pension as they did not satisfy the standard requirement of having entered insurance at least ten years before pension age.
An old age contributory pension is, therefore, now available to those self-employed people who were aged 56 or over in April 1988 and who have at least five years' contributions paid since then. The rationale behind this five years' 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. Payment is at a flat rate of 50% of the standard maximum rate with equivalent increases for adult and child dependants, where applicable. The pension is not being extended to employees as that group is not in the same insurability position as the self-employed group.
I consider these arrangements to be fair, reflecting, as they do, a certain consistency of commitment to the social insurance fund and I have no plans to change this particular pension arrangement for the groups mentioned by the Deputy.