Vol. 518 No. 4
214 Mr. R. Bruton asked the Minister for Social, Community and Family Affairs if his attention has been drawn to the fact that spouses who worked in their husbands' business were not permitted to pay PRSI contributions and were unable to qualify for contributory old age pension; and if he will consider a concession which could extend eligibility to them. [12076/00]
Under the provisions of social welfare legislation, the social insurance status of spouses engaged in a family business varies with the circumstances of the case. A number of different situations can arise. First, spouses who are engaged in a business partnership are treated as individual self employed contributors. Both make social insurance contributions and will be eligible, in due course, to qualify individually and in their own right for social insurance pensions, including an old age contributory pension. While there are specific requirements in company law regarding business partnerships there is no restriction on married couples operating under such partnership arrangements.
Alternatively, where a family business is incorporated as a limited company, spouses involved in the business pay PRSI as either employees of the company or as self-employed persons, if they are the proprietary directors of that company.
However, the legislation also provides that a person who is employed directly by his/her spouse is not covered by social insurance. Social insurance contributions are not due and the employed spouse is not covered for social insurance pensions. Likewise, if a spouse participates in the business of a self-employed contributor, but is not a partner in the business, social insurance contributions are not due and the participating or assisting spouse is not covered for social insurance pensions or benefits.
Any person who wishes to seek a formal decision as to whether an employment or self employment is insurable for social insurance purposes should apply to scope section of my Department. Where a person is dissatisfied with the relevant decision there is a right of appeal to the independent social welfare appeals office.
As regards contributions, a number of arrangements are already in place which cater for the position of persons who are no longer compulsorily covered by social insurance. Former contributors can opt, subject to certain conditions, to make voluntary contributions. In general, voluntary contributions give cover for the pensions which people were covered for when last working as an employee or a self employed person and thereby enable such persons to maintain social insurance cover.
There are also special arrangements available for homemakers which enable persons who work in the home to qualify for an old age contributory pension. From April 1994, contribution years spent out of the workforce caring for children up to the age of six, increased to 12 from April 1995, or incapacitated persons may be disregarded for the purpose of determining the minimum yearly average number of contributions for old age contributory pension purposes. A maximum of 20 years can be disregarded in this way.
My Department will be, during the course of this year, examining the current arrangements applying to the social insurance position of spouses engaged in a family business. I will be giving detailed consideration to the outcome of that examination and, if appropriate, I will bring forward legislative changes in due course.
215 Mr. N. Ahern asked the Minister for Social, Community and Family Affairs if he will clarify the entitlement of a person to earn income when on retirement pension; if he will increase the amount to at least £75 which is the amount that can be earned from rehabilitative employment; if he recognises the value in workers slowly weaning themselves out of the workplace; and if he will make a statement on the matter. [12083/00]
Until the 1970s the qualifying age for old age pensions was age 70. In 1970, the retirement pension was introduced for contributors who retired at age 65. Eligibility for this pension is conditional on being fully retired from employment and/or self-employment. A person is regarded as being retired if his/her earnings from (a) employment are less than £30 per week and (b) self-employment are less than £2,500 per annum.
In the period 1973 to 1975 the age at which a person became eligible for old age pensions, whether contributory or non-contributory, was progressively reduced from age 70 to age 66. Consequently, the retirement condition under the retirement pension scheme referred to above only applies for one year, that is from age 65 to 66.
While there are no plans to increase the earnings thresholds, which are linked to these for insurability under the PRSI system, the position will be kept under review.
