Dáil Éireann debate -
Wednesday, 13 Dec 2000

Vol. 528 No. 2

Written Answers. - Pension Provisions.

Minister for Social, Community and Family Affairs (Mr. D. Ahern)

In recent years considerable flexibility has been introduced into the qualifying conditions for the old age (contributory) pension scheme. Some of the more significant improvements in recent years include the introduction of pro-rata pensions for people with mixed insurance records, the reduction in the number of contributions required for the old age (contributory) pension to a yearly average of ten and the introduction of a special old age (contributory) pension for self-employed people in 1999.

More recently, this year's Social Welfare Act provided for further recognition of contributions paid prior to 1953 through the introduction of a new flat-rate, 50%, pension for people who had previously failed to qualify for an old age (contributory) pension due to the yearly average test or who qualified for a pension payment at a lower rate. All of these measures are making it easier for people to qualify for pension, particularly those who, for one reason or another, have broken insurance records. Specific issues in relation to the operation of the marriage bar in the public service are a matter for my colleague the Minister for Finance.

At present, it is estimated that about 90% of women over 65 years of age are receiving a social welfare pension. Of these 87% have a payment in their own right with about 62% of those who have a payment receiving one based on their PRSI record. While it would be impossible for the social welfare system to cover all gaps in pension coverage, nevertheless, more can be done in this area to improve on the numbers receiving PRSI based pensions. In this regard, I am strongly committed to converting the existing system of homemaker disregards, which help women who take time out from the paid workforce, into homemaker credits. I also believe that, in principle, the homemaker's scheme, which currently operates only from 1994, should be backdated; however, there are significant cost and administrative issues to be considered in this regard. These issues will be considered in the context of the second phase of the review of the qualification conditions for pensions which my Department will undertake in the new year. When implemented this measure should help many more women to qualify for pensions.

In last week's budget, I announced that the rate of the qualified adult allowance for those over the age of 66 would be increased over this and future budgets to the full old age pension rate. As the first step in achieving this, the rate of the qualified adult allowance paid with pensions for persons over 66 years will be increased by £15 per week with effect from the first week in April 2001.

Following on the report of the PPF working group which is currently examining the issues of administrative individualisation, it will be possible in future to pay part of the pension directly to the qualified adult. The issues associated with the implementation of this arrangement are being examined by the working group. This measure, when combined with the proposed increase in the qualified adult allowance will benefit many women who cannot qualify for a payment in their own right.

Michael Bell

Question:

84 Mr. Bell asked the Minister for Social, Community and Family Affairs the estimate of the lost pension arrears for widows and other claimants; and if he has any plans to discharge this debt to many citizens. [29712/00]

Minister for Social, Community and Family Affairs (Mr. D. Ahern)

The legislative provisions relating to late claims for social welfare benefits are set out in section 205 of the Social Welfare (Consolidation) Act, 1993, as amended, and in regulations made under that section. These provisions set out the times within which a person must claim, the disqualifications which apply where a claim is made late, and the circumstances in which the time limits may be extended.

Under existing arrangements, where a claim to old age contributory or retirement pension, widow's or widower's contributory pension or orphan's contributory allowance is made late, arrears of up to 12 months is paid. This applies to any claims made on or after 1 January 1997. Under regulations which I made in 1998 additional arrears beyond 12 months is paid on a sliding scale.

For pension claims made prior to 1 January 1997, arrears of up to six months can be paid. In addition, I obtained Government approval for once-off payments to contributory pensioners who made late claims prior to 1997. Arrears totalling £9.4 million have been paid to 5,700 such pensioners.

Regardless of when late pension claims are made there is provision to pay further arrears, up to the level of full retrospection where the circumstances would warrant it, where the delay in claiming was due to incorrect information having been given by my Department; illness or force majeure prevented a person from claiming earlier; or, the person is dependent on the arrears of payment to relieve current financial hardship.

The payment of full arrears to widows and all late pension claimants would give rise to a once-off cost, estimated at £54 million. In addition, there would be an ongoing annual cost of £3 million.

It is a long-standing requirement of our legislation that claims should be made within a certain time. Similar provisions are a feature of the legislation of other countries.

The changes which have been made in recent years represent a significant improvement in the position that has applied heretofore and, in my view, strike a reasonable balance between the need for effective management of the system and for appropriate recognition to be given to cases of genuine hardship or difficulty. Pensioners with late claims now receive full arrears for a certain period of their claim plus a proportion of arrears over the remaining period of the late claim. Full arrears for the entire period of the claim may be made in certain circumstances. All late claims are determined in accordance with legislation.

I believe that the arrangement which I have made since coming into office in relation to the late claims issue represent a reasonable and fair response to this problem.