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Dáil Éireann debate -
Tuesday, 11 Apr 2000

Vol. 517 No. 6

Adjournment Debate. - PRSI Contributions.

Mr. Coveney:

I thank the Leas-Cheann Comhairle for selecting this topic for debate. The purpose of this motion is to examine the system of PRSI contributions, their conditions and benefits to try to improve the present system by making minor changes. The PRSI system is a fair way of putting money aside to ensure that benefits can be paid out to workers and their spouses, should the need arise. The principle is sound. However, there seems to be a flaw in part of the system for a certain age category. For people between the ages of 25 to 28 or 29 in many cases, the PRSI contribution conditions for treatment benefits are clearly unfair. The benefits to which I am referring are treatment benefits including dental benefit which offers free dental examination, free diagnosis, free scaling and polishing of teeth and partial payment for further treatment. It also includes optical benefits and benefits towards payment for hearing aids.

To qualify for PRSI treatment benefits for somebody who is considered to be starting work, in other words before they reach 25 years of age, they must have at least 39 weeks PRSI paid since starting work and 39 weeks PRSI paid in the relevant tax year – the tax year before they claim. This is fair and is a reasonable time for a young person to wait before receiving benefits. However, the problem arises when a young person reaches 25 years of age. He or she suddenly must have 260 weeks PRSI contributions paid since first starting work. In other words, they must have completed at least five to six years of work before they can qualify for treatment benefits. This huge jump in PRSI contribution requirements results in discrimination against people in their mid and late 20s. In order to qualify for the treatment benefits associated with PRSI contribution at the age of 25, one would have to have worked from about the age of 17, 18, or if they are lucky, 19.

Many more young people are choosing to enter third level education and, therefore, are not beginning full-time employment until the age of 22 or 23 or sometimes even later. Those new members of the work force find themselves eligible for benefits for two or three years and then at 25 suddenly they lose their benefits until they have completed 260 weeks of PRSI payments, or until they are about 30 years of age. This aspect of the system is farcical. For many young people, including a constituent of mine who brought this anomaly to my attention, they only realise to what benefits they are entitled when they are 25 or 26 years of age. The irony is that they realise they were entitled to benefits at 23 and 24 which they never took up but suddenly they are no longer eligible until they reach about 30.

I ask the Minister to consider the introduction of a fairer system which does not have such a large jump in PRSI contribution conditions at this so-called benchmark of 25 years of age. I ask him to consider a system which will introduce a less radical jump with partial increases in the number of weeks required in PRSI payments at various stages over several years in somebody's 20s instead of this jump from 39 weeks to 260 weeks when a young person reaches 25 years of age. We are trying to encourage young people to further their education, to take up third level education and to stay in college for as long as possible to maximise their skills levels. If we are to do this, we cannot on the other hand discriminate against them with our social welfare system, which we are at the moment. With a little imagination this problem can be solved relatively easily.

An underlying principle of the social insurance system is that to establish entitlement to benefit, a person must have been insurably employed and paid appropriate PRSI contributions for a certain length of time. The PRSI contribution conditions relating to entitlement to treatment benefit vary depending on the age of the insured person. Persons aged under 21 must have at least 39 weeks PRSI paid since first starting work in order to qualify while persons aged from 21 to 24 must have at least 39 weeks PRSI paid since first starting work and 39 weeks PRSI paid or credited in the relevant tax year, of which a minimum of 13 weeks must be paid contributions. In the case of persons aged from 25 to 65, the requirement is that they have at least 260 weeks PRSI paid since first starting work and 39 weeks PRSI paid or credited in the relevant tax year of which a minimum of 13 weeks must be paid contributions.

Persons aged 66 or over are required to have at least 260 weeks PRSI paid since first starting work and 39 weeks PRSI paid or credited in either of the last two tax years before reaching age 66 of which a minimum of 13 weeks must be paid contributions. The latter requirement, that is the 13 weeks paid contributions, does not apply in the case of certain social welfare recipients. The treatment benefit scheme provides a range of benefits in the areas of dental, optical and aural treatment for qualified PRSI contributors and their dependent spouses. As regards dental benefit, an examination and scale and polish is available free of charge to the qualified claimant. In the case of fillings and extractions, the Minister's Department pays 70% of the agreed fee in accordance with the scale of fees negotiated on behalf of the dentists operating the scheme and the claimant pays the balance. An agreed fee also applies in the case of dentures with the claimant and the Department each paying 50%. For other treatments, the Department pays a fixed contribution towards the cost and the claimant is liable for the balance charged by the dentist.

As regards optical benefit, the qualified person can obtain an eye examination free of charge together with a pair of spectacles from a limited range of frames. Where a more expensive frame is chosen, the Department pays a fixed contribution with the claimant paying the balance. A similar arrangement applies in the case of contact lenses. In the case of hearing aids, the Minister's Department pays up to one half of the cost of a hearing aid subject to a maximum payment of £225 and up to half the cost of any repairs.

In 1999, some 618,000 claims for treatment benefit were approved by the Department of Social, Community and Family Affairs at a cost of some £35.6 million. Some 430,000 related to dental benefit. The PRSI contribution conditions for treatment benefit are generally in line with those applying to other contributory benefit schemes. These conditions are necessary to ensure the continuing viability of the scheme while directing limited resources towards those in greatest need, including dependent spouses of insured workers. They also ensure a realistic relationship between entitlement to benefit and a continuing or recent attachment to the workforce through an active PRSI contribution record. While the Minister has no plans to change these contribution conditions, the conditions of all schemes are kept under review. I thank the Deputy for raising the matter.

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