Dáil Éireann debate -
Tuesday, 10 Apr 2001

Vol. 534 No. 3

Written Answers. - Pension Provisions.

Bernard J. Durkan

Question:

45 Mr. Durkan asked the Minister for Social, Community and Family Affairs if he will extend pro rata pension entitlements in order to facilitate qualification for old age pensions to those who have less than the required number of contributions; and if he will make a statement on the matter. [10528/01]

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

In line with the Government's commitment to ensuring the widest possible coverage for contributory pensions, in recent years more flexibility has been introduced into the qualifying conditions for the old age contributory pension scheme. The reduction in 1997 in the average yearly number of contributions required for pension purposes from 20 to ten was particularly significant in this regard. Arrangements were also introduced to cater for particular groups who would not otherwise qualify for a pension. These include the special pension introduced in budget 2000 for those with pre-1953 insurance and the self-employed pension introduced in 1999. In both cases, at least five years contributions are required and the pension is paid at 50% of the full personal, qualified adult and child rate.

Pro rata pensions exist in the social welfare system for those with mixed insurance records and with insurance from other countries. These pensions also require a certain degree of insurance and, in general, the basic qualifying conditions which apply to pensions must still be satisfied. However, the contributions assessed can be a mixture of different rates or contributions from other countries. The rate of pension payable is in proportion to the periods of insurance completed at the rate appropriate for old age contributory and retirement pensions in this country.

I consider it reasonable to expect people to attain a certain level of contributions over their working career to qualify for a contributory-based pension. From an equity perspective, a certain contribution threshold must apply. This not only upholds the social insurance principle, firmly supported by successive Governments, but also affirms the expectations and entitlements of those who have a history of strong attachment to social insurance. In the circumstances, a minimum standard must apply and I would not consider it appropriate that pensions should be paid to people who do not meet this minimum standard.

My Department is currently reviewing the qualifying conditions for the old age contributory and retirement pensions and the Deputy will recall that I published the first phase of this review in August last year. One of the proposals of the first phase report involves a change in the qualification conditions from the current one based on average yearly contributions to a system based on the total number of contributions paid or credited over a person's working life. This would represent a significant change in approach for overall pensions policy. However, in principle, such a system would be more transparent, simpler and more easily understood by the public.

Phase two of the review, which is under way, is examining this proposal in more detail with particular reference to cost and operational issues and the appropriate number of contributions which might be required for pension purposes. I expect to receive the phase two report later this year and will consider its proposals in a budgetary context.