Dáil Éireann debate -
Tuesday, 11 Dec 2001

Vol. 546 No. 3

Written Answers. - Pension Provisions.

Brian O'Shea

Question:

43 Mr. O'Shea asked the Minister for Social, Community and Family Affairs if he will report on anomalies, which senior citizen representative bodies contend exist, regarding pension entitlements of workers who pay a modified stamp rather than a full stamp. [31610/01]

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

In order to qualify for old age contributory and retirement pensions a person must, amongst other conditions, have paid social insurance at an appropriate rate. Social insurance at the modified rate paid by many public servants does not provide cover for these pensions.

Historically, most public servants were excluded from full social insurance cover because it was considered that they had provision within the terms and conditions of their public sector employments for adequate cover for contingencies such as sickness or old age and that the risk of unemployment was not a factor in their case. Full PRSI coverage was extended to new entrants to the public service in 1995 with consequent changes in the occupational pension arrangements. All other public servants continue to pay the modified rate of social insurance which does not give coverage for old age contributory or retirement pensions.

There are a number of measures in place which allow those with mixed rate insurance records to receive a payment. These arrangements provide for the payment ofpro rata pensions in pro portion to the periods of insurance completed at the Class A rate.

More recently, I introduced a special flat-rate old age (contributory) pension, payable at 50% of the maximum personal rate, to benefit people with pre-1953 social insurance contributions who, due to the yearly average rule, failed to qualify for a pension. I understand that former public servants are one of the main groups benefiting from these measures.

Another area which is of benefit to former public servants is the free schemes. In October 2000, the free schemes were extended to all people over 75 years of age regardless of their income or household composition. Further changes were introduced in May 2001 to bring the qualifying age down to 70. The schemes are also available to former public servants aged 65 to 69 subject to satisfying a means test and the necessary living alone conditions. These measures have made a major contribution to improving the position of those who paid a modified rate of social insurance.