The group of people referred to by the Deputy are in receipt of reduced rate pensions equating to 50% and 75% of the standard, maximum old age contributory pension rate. These rates of payment are based on their yearly averages of between ten and 19 contributions. Such people benefited under the measure which I introduced in November 1997 which provided for a reduction in the yearly average from 20 to ten, thereby extending contributory pensions coverage to a significant number of people who would otherwise have failed to qualify.
The Social Welfare Bill, 2000, proposes two distinct measures in relation to the old age contributory and retirement pensions schemes. Firstly, it is proposed to introduce a special measure in relation to certain people with social insurance contributions paid prior to the introduction of the unified system of social insurance in 1953. While such contributions may, at present, be used to satisfy two of the three qualifying contribution conditions for the old age contributory pension, they cannot be used for the yearly average test as they contain no pension element.
As a result, some people who had paid contributions prior to 1953 failed to qualify for this pension due to the operation of the "yearly average" test. This Bill, therefore, provides for the introduction, from next May, of a special, flat rate old age contributory pension to any person who became insurably employed prior to 1953 and who, due to the yearly average rule, failed to qualify for pension or qualified for a pension at less than 50%, i.e. £48 per week from May, of the standard maximum rate. To qualify, a person must have paid, at least, 260 contributions which may comprise all pre-53 contributions or a combination of pre and post-1953 insurance. Thus, for, example, a person with six years social insurance paid prior to 1953 will have 468 contributions accredited under the three for two rule.
Accordingly, the introduction of this special flat rate pension will confer no additional advantage to the group of people referred to above as their pension rates from next May, will equal or exceed the new 50% flat rate pension, i.e. £48.00 per week.
