Dáil Éireann debate -
Tuesday, 2 Dec 2003

Vol. 576 No. 1

Written Answers. - Pension Provisions.

Liz McManus

Question:

120 Ms McManus asked the Minister for Social and Family Affairs the reasons her Department so substantially underestimated the cost of extending pension rights to those who had pre-1953 insurance contributions; the original estimated cost when the decision was made and the actual cost; the steps being taken to ensure that all such decisions are accurately costed in the future; and if she will make a statement on the matter. [28953/03]

Minister for Social and Family Affairs (Mary Coughlan)

In May 2000, a special half rate old age contributory pension was introduced to enable people with pre-1953 insurance, who could not qualify for a payment under normal qualifying conditions, to receive a pension. People already qualifying for pensions at less than half rate could also benefit from the new scheme. In order to be eligible for the payment, a person needs 260 paid contributions at the appropriate rate, which can comprise a mixture of pre-1953 and post-1953 contributions.

Based on an analysis of pension claims which failed to satisfy the standard conditions and on experience of take up on previous pension measures, it was estimated that 3,000 persons would qualify for the new pension in 2000 at a full year cost of €8.9 million. The overall claimload ultimately was not expected to exceed 5,000 people. To date, a total of 28,649 pre-1953 pensions have been awarded. Almost 63% of these pensions are being paid to residents of the UK and other countries. The cost in 2002, which includes the budget increases in those payments and arrears, amounted to €113 million.

One of the difficulties in estimating costs in this case was that the records available in the Department on pre-1953 contributions were not in such a form as to allow for ready estimation of the numbers of contributions. Many of the records in question were incomplete and had to be supplemented by separate information obtained when claims were made. Furthermore, the Department, based on its databases, did not anticipate the number of successful claims which would be made by persons resident abroad.

It must be acknowledged that the numbers qualifying and the overall cost of this measure have been seriously underestimated. That said, my Department is frequently required to estimate the costs of policy measures and its record in this regard is a good one. This has been recognised by the Department of Finance. The experience in this case was highly unusual and related to lack of data. However, the Department will take on board the specific lessons of this project in estimating the costs of similar proposals in the future.

Question No. 121 answered with Question No. 110.

Trevor Sargent

Question:

122 Mr. Sargent asked the Minister for Social and Family Affairs if she has received, or expects to receive, recommendations from the Pensions Board on changes to the winding-up of pension funds; and if she will make a statement on the matter. [29023/03]

Minister for Social and Family Affairs (Mary Coughlan)

The Pensions Board is currently examining a number of issues relating to the operation of the minimum funding standard for defined benefit occupational pension schemes and the priorities which apply in a winding up. The issues involved are complex and require careful and detailed consideration. To date, I have received no proposals from the board in this regard.

Question No. 123 answered with Question No. 89.

Question No. 124 answered with Question No. 73.

Pat Rabbitte

Question:

125 Mr. Rabbitte asked the Minister for Social and Family Affairs if her attention has been drawn to the difficulties created for officers of the Defence Forces who served during the period of the Emergency between 1939 and 1946 who are now denied the reduced pension payable to other ranks, apparently as the result of an anomaly in the Widows and Orphans Act 1938 which regards only other ranks as insured persons; if, in view of the small number of such surviving officers and the hardship caused, she will consider dealing with the problem; and if she will make a statement on the matter. [28951/03]

Minister for Social and Family Affairs (Mary Coughlan)

I understand, from additional information supplied to my Department for a similar question on 5 November 2003, the question concerns a former Army officer who applied for a living alone allowance from my Department and was refused. The refusal was based on the grounds that he is not in receipt of a pension from my Department. The living alone allowance is not a payment in its own right but an allowance which can only be paid as a supplement to an Irish social welfare pension such as the old age contributory or non-contributory pension.

Commissioned Army officers recruited prior to 6 April are insurable under PRSI class C. Contributors can build up entitlements to a number of benefits under this class as follows: widow's or widower's contributory pension, orphans contributory pension, bereavements grant and carer's benefit. Enlisted personnel of the Defence Forces are insurable at class H which provides additional entitlements, including old age contributory pension. The Army officers concerned are not entitled to an old age contributory pension on the basis of their class C contributions. However, a person may qualify for a non-contributory pension if he/she has income below a weekly means threshold which is currently set at €147.60.

Question No. 126 answered with Question No. 110.

Question No. 127 answered with Question No. 65.

Question No. 128 answered with Question No. 78.