Dáil Éireann debate -
Wednesday, 30 May 2001

Vol. 537 No. 3

Written Answers. - Pension Provisions.

Noel Ahern

Question:

208 Mr. N. Ahern asked the Minister for Social, Community and Family Affairs if, having now introduced the pre-1953 pension scheme in 2000, he will give credit for pre-1953 contributions where people are on reduced contributory pensions; if he will give details of the number of people over 65 years of age currently on reduced pensions, excluding pre-1953 types; the estimated cost of giving full credits for pre-1953 contributions; if he will clarify the case of a person (details supplied) where his pension is £2 per week short of the full pension but has eight to ten years of pre-1953 contributions for which he receives no credits; and if such cases can be examined. [16316/01]

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

In general, all contributions paid or credited, at the appropriate rate, on a person's record are assessed when their entitlement to a pension is being examined. However, while pre-1953 insurance contributions may be counted towards the basic number of paid contributions required, they may not be used to satisfy the average contributions test. Only contributions made under the unified social insurance scheme, introduced in 1953, can be used to satisfy this test.

The question of allowing pre-1953 insurance to be used for the average contributions test was examined in the first phase of the review of the qualifying conditions for the old age contributory and retirement pensions which was published in August 2000. The Review did not favour affording full recognition to these contributions because such contributions are different in nature to contributions made under the unified system.

The special flat rate old age contributory pension – OACP – payable at 50% of the maximum personal rate, introduced from May 2000 is primarily designed to benefit people with pre-53 social insurance contributions who, due to the yearly average rule, failed to qualify for a pension. This is a special measure designed to benefit people who would not otherwise receive a pension, though some people who were already receiving pensions based on mixed insurance, at less than 50% of the maximum rate, have also benefited by transferring to this special pension.

There are currently 31,103 people in receipt of old age contributory pension, aged 66 or over, at a reduced rate, excluding those in receipt of the special pre-53 pension while the corresponding figure for those on retirement pension, aged 65 or over, is 17,586.

In the absence of a detailed assessment of the insurance records concerned it is not possible to accurately estimate the cost of allowing pre-53 insurance to be used in assessing a person's yearly average contribution record. However, if all these pensioners moved to a maximum rate old age contributory pension, the cost would be approximately £25 million per annum.

The Department's records show that the person concerned has a total of 1,200 contributions recorded for the period 1953 to 1986, 33 years. This is equal to a yearly average of 36 contributions which entitles him to a reduced rate pension of £103.90 per week, applicable to those with a yearly average of between 20 and 47 contributions. He has a total of 406 insurance contributions paid for the years 1944-52 inclusive but the inclusion of these contributions would be of no benefit as his yearly average would still be considerably below the 48 contributions required for receipt of maximum rate old age contributory pension.