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 was 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.
Since April 1999 a special old age contributory pension has been available to those self-employed persons who were aged 56 or over in April 1988 and who have, at least, five years contributions paid since then. Payment is at a flat-rate of 50% of the standard maximum rate with equivalent increases for adult and child dependants, where applicable.
It is important to stress that this special arrangement represents a positive and reasonable response to the situation in which this group of people found themselves.