Under the terms of the Programme for Prosperity and Fairness, a working group was established to examine the range of complex issues associated with the benchmarking and indexation of social welfare payments. The group comprised representatives of the social partners and relevant Departments and was chaired by an independent chairperson, Professor Kieran Kennedy, former director of the Economic and Social Research Institute.
The group began its work in December 2000, produced an interim report in April 2001 and completed its work with a final report in September 2001. In An Action Programme for the Millennium, the Government was committed to increasing the rate of the old age pension to £100 or €126.97 by 2002. This commitment was later extended, in the review of An Action Programme for the Millennium midway through the Government's term of office, to cover other payments made to people over 66 years of age, and in the case of widows and widowers a further commitment was made to increase the contributory payment to the same level as the old age contributory pension.
The current rate structure, which comprises an under 66 and over 66 rate, was introduced in 1998 and since then widows and widowers over 66 years of age have received a number of special increases in pursuit of the commitments and objectives I have outlined. At this stage, those over 66 years of age have received increases amounting to almost 50% since 1998 while those under 66 years of age have seen their payments grow by about 31%. With the increases granted in 2002, the initial commitment in relation to payment rates for those over 66 years of age has been met in all cases.
With regard to the question of social insurance, cover for widows' and orphans' pensions is encompassed in the standard PRSI contributions. The rate at which PRSI is levied is not related to the final payment a person can expect. Information on the different rates which apply to various schemes is, of course, available in the Department's information literature.