JOINT COMMITTEE ON SOCIAL AND FAMILY AFFAIRS debate -
Wednesday, 31 Mar 2010

Contributory State Pension for Farm Spouses: Discussion with IFA.

Chairman

We will have a presentation from the Irish Farmers Association, IFA, on the decision by the Department of Social and Family Affairs to rescind the contributory State pension to spouses over 66 who successfully applied for retrospective partnership status and had been approved a contributory pension. From the Irish Farmers Association I welcome Mr. John Bryan, president, Ms Margaret Healy, chairperson of the farm family and social affairs committee, Mr. Pat Smith, general secretary, and Ms Geraldine O'Sullivan, executive secretary.

I draw witnesses' attention to the fact that members of the committee have absolute privilege but the same privilege does not apply to witnesses appearing before the committee. Members are reminded of the long-standing parliamentary practice to the effect that members should not comment on, criticise or make charges against a person outside the House or an official by name or in such a way as to make him or her identifiable.

We agreed the session would last for 40 minutes as we have important briefings from two Departments. I intend to adhere strictly to the schedule. I ask the IFA members to limit their opening remarks to five minutes, as requested in the letter of invitation. I urge members to be brief and concise in their questions. In that context I suggest we agree to limit question time to five minutes for the Opposition spokespersons and two minutes for all other members. The IFA can then make a single response to all questions. Is that agreed? Agreed. I invite Mr. Bryan to commence his presentation.

Mr. John Bryan

I thank the committee for the opportunity to outline our opposition to the decision taken by Department of Social and Family Affairs to backtrack on an agreement reached in good faith with the IFA. This agreement allowed farm spouses to establish self-employed partnership status retrospectively and apply for a contributory State pension.

I am accompanied today by Margaret Healy, chairwoman of the IFA farm family and social affairs committee, Pat Smith, IFA general secretary, and Geraldine O'Sullivan, farm family and social affairs executive. There are several representatives from the farm family committee also present.

Let me set out the factual background. The Department of Social and Family Affairs has received 1,077 applications to establish self-employed partnership status retrospectively since June 2008. Some 60% of the applicants are over 66 years old. Some 913, or 85% of the applications, relate to farm spouses applying for farm business partnership status retrospectively. Approximately 600 applications have been processed to date and 510 were deemed to have a partnership. Of the 510 applicants that were granted business partnership status, 268 pensions were disallowed as a result of the then Minister's decision in January 2010. The other 332 are considered eligible for the contributory State pension. Some 500 applications are still to be processed by the Department.

The IFA is here today to represent the 268 farm women who, without warning, had their pensions stopped. The average age of the women concerned is 72 years old, but some are in their 80s. For the past 14 weeks they have been without a pension and have been living in the main off their husband's pension. Others are dependent on savings or charity from family and friends. I have met many of these women and their families. They are very aggrieved and upset at the injustice of the decision taken by the Department of Social and Family Affairs to disallow the pension.

This decision to deprive farm women of a pension is a heartless move against a hidden workforce who had finally gained some recognition for decades of work on the farm. This decision does not sit well with the Department's mission statement, "to promote a caring society through income and other support services, enabling active participation in society, promoting social inclusion and supporting families". I doubt very much that stopping a person's only source of income promotes social inclusion. I would say social exclusion is the more likely outcome.

The women concerned who applied for partnership status entered into an agreement with the Government in good faith. They honoured their part of the agreement, applied to establish self-employed partnership retrospectively and paid all relevant PRSI contributions which entitled them to a contributory State pension. The agreement was negotiated with Government over a long period within the framework of the social partnership agreement Towards 2016, which aims as part of the life cycle framework articulated in the vision statement for older people, that they be able to have access to an income which is sufficient to sustain an acceptable standard of living.

Based on the agreement reached with the Department of Social and Family Affairs and the Revenue Commissioners in 2008, the IFA encouraged these women to change their legal status and apply for business partnership status retrospectively. This agreement accepted that PRSI contributions paid by the farmer on the income earned on the farm should have been paid in the names of the farmer and his wife on the basis of the farm partnership. The outcome of the negotiations with the Department and Revenue Commissioners was that spouses working in partnership in previous years, but who did not claim so when making annual tax returns, could claim partnership status retrospectively. If approved, they were brought into the social insurance system, provided they met any outstanding PRSI liabilities.

The application process reflects the terms of the agreement. The Revenue Commissioners split the income earned on the farm according to the terms of the business partnership and create a full PRSI history for both parties. Any PRSI contributions owing are paid and a full PRSI record is created for both parties. I wish to bring to your attention the wording of the 2008 agreement with the Department of Social and Family Affairs, which states, "spouses who were effectively working in partnership in previous years, but who did not claim so when making their annual tax returns, will have the opportunity to claim for a spouses partnership status retrospectively".

The Government has a responsibility to these women, whom it actively encouraged to apply. A recent IFA survey of the women concerned shows that 34% of them had worked prior to getting married and going to work on the farm in partnership with their husbands. The average PRSI back-payment was €3,300 per farm spouse. Typically, this money was borrowed on the basis of getting the contributory State pension. An estimated €900,000 has been paid to the State in back-dated PRSI contributions. Some 30% of the women concerned were in receipt of some pension prior to establishing a farm business partnership retrospectively. They were typically in receipt of a qualified adult or private pension. The average weekly pension rate was €173. The additional liability to the State is estimated at less than €570,000 per annum to honour the agreement and pay the contributory State pension to the 268 farm women.

The background to the agreement was to provide recognition to the women who had worked and managed the farm in partnership with their husbands, having in some instances been forced to resign from jobs when they got married. Today, more than 50% of farms have at least one off-farm income and most farm spouses have an independent PRSI record.

In conclusion, I would like to put it on the record, that the women affected have a legitimate expectation to the contributory State pension. The Government cannot abandon its agreement with IFA on farm spouse pensions

Chairman and members, I have welcomed the appointment of Deputy Éamon Ó Cuív as Minister for Social Protection. I want to acknowledge that the Minister, Deputy Ó Cuív, has always shown a genuine interest in rural and community affairs and has recognised the importance of social protection. I trust that he will move quickly to recognise the legitimate cases of the women whose farm partnerships were approved by the then Department of Social and Family Affairs, and I put on record that the IFA will work constructively with him and his officials in this regard.

The Chairman is very well aware that a serious injustice has been done to these women and we would appreciate any help that he can give the IFA to work with the Minister to solve the problem.

Chairman

Thank you very much.

Deputy Olwyn Enright

I welcome the president and members of the IFA. I wish Mr. Bryan well during his presidency.

The president and members will be aware that the former Minister for Social and Family Affairs appeared before the joint committee a number of weeks ago when we raised this issue. Indeed Ms Margaret Healy and Ms Geraldine O'Sullivan were present at that meeting. We teased out the issues with the Minister, Deputy Hanafin, but did not get a positive response. I think the case has been outlined quite clearly this morning. Members have been told at all times that an administrative error was made and that was the line which the then Minister firmly put forward.

It is quite clear and when one reads the press release from 2008, as many have done, that negotiations had been entered into and the press release effectively celebrates the reaching of an agreement between the Department, the Government and the IFA on this issue and that agreement at all times amounted to allowing people to back pay the PRSI contributions to allow them to receive a contributory State pension.

The president has outlined the difficulties, but what I would like to see is a resolution from the committee to the new Minister for Social Protection, Deputy Éamon Ó Cuív, asking him to honour the original agreement that was made. There was a legislative change in the Social Welfare Bill prior to Christmas. A new Social Welfare Bill will come before the Dáil after Easter and I would think that if legislation is needed to honour the agreement, the Government should change this decision and allow the 268 women to receive the pension. It boils down to the fact that each woman was working with her spouse in a partnership on the farm. They earned this and paid for it and the Department knowingly calculated pages of figures to allow them to make the PRSI payment, which they did and it should be honoured.

Deputy Róisín Shortall

I welcome Mr. Bryan and his colleagues to the committee. I would like to offer my own support and the support of the Labour Party for the campaign that is under way. I agree with Deputy Enright. It is the job of the committee to assist the IFA in whatever way it can to get a satisfactory resolution of its campaign. The farm women concerned have been treated in a very shoddy manner by the Government. The understanding was that there was an agreement in place and people made the back payments in good faith under the terms of the agreement as set out to them, yet it now seems the Government is welching on that agreement. This represents a terrible slap in the face for those farm women who have contributed so much to the local economy over the years. It is only right that such a contribution should be properly recognised through our social welfare system.

Can the witnesses provide some detail on the information given to them by the Department at the time, including any written undertakings? I assume that several of the 268 cases are under appeal at the moment. How many are being appealed? If the case was made under the social welfare appeals system or through the Office of the Ombudsman, then a very good case could be made. This committee is very keen to support the witnesses, but it would help us if any written advice or undertakings provided by the Department were given to us.

Deputy Mattie McGrath

I welcome the president of the IFA, his colleagues and his many supporters who are very concerned about this issue. On behalf of the Fianna Fáil Deputies, I can say that we are wholeheartedly supporting Deputy Enright's suggestion that we table an amendment and talk to the Minister at a committee meeting. We are upset about this. It was a deal that was done in good faith. It was worked out and people were advised to back-pay their PRSI contributions. I come from a farming family and my mother is still alive. I know well the work that spouses do on these farms. A long time ago there were big families on farms, but now they are very lonely institutions, so spouses are all the more important.

We all have a copy of Deputy Moynihan's letter. It is a very serious situation and we will insist that it be rectified.

Senator Nicky McFadden

I welcome Mr. Bryan and his colleagues. This is a serious issue and I warmly welcome Deputy McGrath's contribution and that of Fianna Fáil, but I wonder why they did not have any influence over the Minister if they still feel so strongly about the issue. Apart from the agreement with the IFA, it seems that the Government had a contract with these women but that it has reneged on this contract. That is very serious. It is not acceptable to enter into a contract and then break a promise. The witnesses are right to quote the mission statement. These women have made contributions all of their lives, and now they are getting a kick in the teeth. We should remember that this would cost the State only €570,000, when compared with the billions of euro that have been put into NAMA. It is an outrage that 268 women will be sacrificed for €570,000.

I fully agree with this campaign and I will do anything I can to support it.

Deputy Charlie O’Connor

I welcome the IFA delegation and I wish Mr. Bryan well in his term of office. There is a myth that there are no farmers in Tallaght. I appreciate the briefings that we get from the IFA through the Dáil liaison officer, Ms Elaine Farrell. They are very helpful for people like me, as I am not an expert on farming issues. I agree with Deputy Enright's suggestion. The new Minister with responsibility for this area, Deputy Ó Cuív, should be brought here as soon as possible to deal with this and other matters. We should clearly signal the concerns that have been expressed by all parties this morning.

I wish the IFA delegation well, and if they want to do any campaigning in Tallaght, I welcome them.

Deputy Seymour Crawford

I welcome my colleagues from the IFA. I worked at national level with the IFA and I know the effort they put into these issues. I congratulate Mr. Bryan for providing clear and succinct information to this meeting. It is an extremely serious issue.

I was one of those back in the 1970s who promoted the idea of farmers paying PRSI. It started in April 1988, but the spouse issue was only detected 20 years later. I dealt with a case recently of a spouse who applied but was told by Department officials that she was not entitled to the pension. In this case, it was the spouse who ran the farm while her husband worked in a full-time job. That gives us some idea of the lack of information that was denied the inspectorate over the years.

These women went through a rigorous investigation by the Department of Social and Family Affairs. This was not dealt with just by one person in the Department, but by the local inspector, the deciding officers and by all others. To blame the individual women is not just wrong, but illegal. That message has to go out loud and clear.

I welcome the tremendous support today from my Fianna Fáil colleagues, although they are few and far between here. I welcome what Deputy McGrath and Deputy O'Connor said, because I respect them as individuals. The problem is that when the Minister, Deputy Hanafin, was in charge, we did not get that support. She completely denied any responsibility for it. I welcome the appointment of Deputy Ó Cuív to this Department and I believe that he will be more realistic and more sympathetic. We will rely on the Fianna Fáil backbenchers to ensure that this actually happens, because if it has to go to a vote in the Dáil, then the decision will be made there.

I was involved with Ms Mary Sherry as the former chairperson of this committee. She put tremendous effort into it and it is extremely disappointing that the Minister should walk away from this and suggest that it was just a mistake. We must remember it is not just that the money was stopped. There is actually a demand to repay money they had been paid previously. That is an outrage and completely unacceptable.

While I apologise for taking so much time, I am very emotional about this issue. It is legally wrong. We must get that message across clearly to the Minister that if he does not do this in a co-operative and political way, he will have to face the rigours of the law.

Senator John Paul Phelan

I welcome the representatives of the IFA, including my neighbour, Mr. John Bryan, and thank them for their succinct presentation in which they outlined their case strongly. I place on record my support for their campaign.

It was Mr. Séamus Brennan, when Minister for Social and Family Affairs prior to the 2007 general election, who, upon the questioning of a number of Government and Opposition Members, seriously took up the idea of pensions for farmers' spouses for the first time. This was followed on by the Minister, Deputy Mary Hanafin, when the Department of Social and Family Affairs reached agreement with the IFA in 2008. The Government is trying to put this down to an administrative error. It is not an administrative error. It is an agreement that was clearly entered into by the Department at the time and it is now being reneged upon.

It is an issue which is very close to my heart. I grew up in a household where my mother had no income. She worked all her life on farms, whether where she was reared in Inistioge, Mr. Bryan's home area, or where she lives now. She is not getting fair treatment and there are hundreds of people like her who are not getting fair treatment.

Some 268 women have been accepted into the scheme. As Deputy Crawford pointed out, it is not just a case of stopping the money but the Department is seeking that money paid would be paid back. This is completely morally unjustifiable and, as Deputy Crawford pointed out, illegal. Yesterday, we were talking about billions of euro to invest in our banks. Today, we are talking about little more than €500,000 to give some sort of justice and recognition for the efforts these women have put into running a family business, which is what a farm is, over many years. It is not good enough.

I do not doubt the sincerity of Deputies Charlie O'Connor and Mattie McGrath in terms of what they want to see happen in this situation. However, it is time to put up, not just talk about it. The Minister, Deputy Hanafin, was at the committee a number of weeks ago and there was no support from the Government benches to put pressure on her to change her position. Now, with a new Minister, who I believe will be more sympathetic towards rural Ireland, it is time to put pressure from the Fianna Fáil backbenches and from all quarters to ensure the agreement that was entered into in 2008 is honoured. If the Minister reneges on that commitment, I would be glad to have support from the Fianna Fáil side, for example, if a Private Members' motion were tabled by Fine Gael or the Opposition sought for this money to be reinstated to where it rightly belongs.

Senator Paul Bradford

I welcome the delegation. Unfortunately, what they have said today is nothing new to me as I know the story inside out and upside down. Despite the efforts of the past seven or eight years, including prior to the agreement we thought was reached with the Department and which I pursued very vigorously with previous Ministers, I came to the sad conclusion following the brief discussions I had with the former Minister, Deputy Hanafin, that she clearly did not understand the foundation of the scheme which had been agreed.

People have received letters stating they are disqualified from the pension on the basis that a PRSI contribution had not been made before they had reached the age of 66. As the delegation will know, and I am bemused that people see this as complicated, the genesis of the scheme and the debate over the past decade was to put in place a scheme for people who had not paid PRSI before they reached 66 but who had been eligible and entitled to do so. We all know that if one was 67 years of age and it was found that one had a tax bill owing to the Revenue Commissioners, they would collect it. We debated the prospect of putting in place a scheme for people who had not paid PRSI before they were 66 but who had been eligible to do so, and that was the basis of the agreement. The late Minister, Mr. Séamus Brennan, God rest his soul, clearly understood what he was putting in place. It seems the decision made two months ago stemmed from the fact the then Minister, Deputy Hanafin, did not understand the scheme which had been negotiated.

I wish the delegation well in their endeavours. I look forward to engaging with the new Minister. This is a matter of natural justice. The current position is unsustainable.

Deputy Seán Sherlock

I apologise for missing the submissions as I was attending a meeting of the Joint Committee on Agriculture, Fisheries and Food. The issue is one of equity. It also speaks to the fact of how women are treated vis-à-vis the pensions system as a whole in this country. The issue is very simple in that if the terms of a scheme are agreed, people buy into the scheme in good faith and the bona fides of the scheme are clearly established, as a matter of equity and fairness it is necessary that the obligations of the scheme are met. These women signed up to the scheme in good faith and the State should honour its commitments in that regard. There is also the wider issue of the treatment of women who are atypical workers, if I can use that phrase, and how we are to deal with their pensions provision into the future. I welcome the submissions. I have been in touch with the IFA on the issue and welcome the fact it is represented here today.

Chairman

I will allow Deputy Creed one minute to address the meeting, although it should only be one minute as he misbehaved at a previous meeting.

Deputy Michael Creed

I congratulate the Chairman on his initiative after we crossed swords on the last day. He reacted and we are making progress today.

The one change I welcome since we met last is that there is a new Minister for Social and Family Affairs. I hope the new Minister will take up this issue on its merits. It is not exclusively confined to the farming community, although it is predominantly an issue for farmers' spouses.

While I do not want to go over old ground, given that people in their advanced years received the kind of correspondence which they did with all its connotations in respect of moneys paid and dreams denied in terms of expectations, there is really only one course of action. Everybody present, including those sitting behind me more than most, knows the country is broke. However, we are not talking about a lot of money and we are talking about a real injustice perpetrated on vulnerable people.

From an actuarial perspective, I have not done the maths but from the replies to parliamentary questions, the Minister seemed repeatedly to confirm that we are talking about a small number of people. I have seen nothing to suggest there is a dam about to burst and that a huge number of financial liabilities will be exposed if the Minister does not continue with this line of action. This is a good step on the road to recovery but it is based on the premise that everybody approaches it from the point of view of problem fixing. If this is the case, the issue can be resolved.

I hope the IFA will continue to lobby on the issue. At a political level, I understand the committee has agreed a course of action in respect of pursuing this with the Minister. I hope the Minister will come to the issue with clean hands.

Ms Margaret Healy

I welcome the wholehearted support of the speakers for our campaign. As Deputy Creed said, receiving these letters was very difficult. For example, there is an 82 year old woman who is afraid she will go to jail because she cannot pay back the money she got, and the Department is looking for 18 months to two years of pension back. Many of these women had to borrow the money to pay back their PRSI contributions. We must bear in mind how this has affected people individually. These women should not be subjected to such treatment at their age. They followed all the rules, ticked all the boxes and did everything that was asked of them. They did nothing wrong and should not have to appeal the decision that was made. It takes two to three months for appeals to be processed and the women concerned are without money since January. They got a letter on a Tuesday informing them there would be no pension for them on Friday. I know a couple in Kerry who are surviving on €115 per week between them. It would be impossible for them to get by without support from their family. I welcome wholeheartedly the support expressed by members but it must extend beyond this room. Support must translate into action.

Mr. John Bryan

I appreciate the contributions from members. It is clear they have a good understanding of the issue. This was an agreement freely entered into between the women concerned and the Department of Social and Family Affairs. Letters were issued setting out that agreement and it was approved at senior level within the Department. Nothing gets done in that Department without the approval of senior staff. Everything was done as it should be and the women concerned began receiving their payments. It is totally unjust for the Department to seek now to reclaim that money.

I appreciate the strong commitment given by the Chairman that not only will the committee lobby the Minister, Deputy Ó Cuív, but, if necessary, will recommend an amendment to the Social Welfare Bill. It is essential that justice be done. These people have worked all their lives and have made a significant contribution. I am sure the Chairman, like other members, knows some of those affected. It is a problem that must be solved and it should not take legislation to do it. The Minister, Deputy Hanafin, agreed a deal and reversed it with the stroke of a pen; it should only take the stroke of a pen to reverse it. These are elderly people who cannot afford to wait indefinitely. We would appreciate the committee's help in urging the Minister, Deputy Ó Cuív, to resolve this as soon as possible.

Deputy Olwyn Enright

Will the Chairman clarify that it is proposed that the committee will write to the Minister?

Chairman

That is exactly what I am proposing. We will write to the Minister with a transcript of the meeting, asking him to reconsider the decision in this matter.

Deputy Olwyn Enright

That was not the proposal. We are asking him not to reconsider but to rescind the decision.

Chairman

Yes, and we will ask to discuss the matter with him at the meeting on 24 April.

Deputy Olwyn Enright

To clarify, the proposal that was supported by all members was that we would ask the Minister, Deputy Ó Cuív, to rescind the decision, to reinstate the pension and if legislation is necessary, that an amendment be made to the Social Welfare Bill. There was a proposal that we invite the Minister to the next meeting. I do not want another discussion on this because the witnesses will not be there and the atmosphere could be quite different, as it was the last day when the Minister, Deputy Hanafin, was here. There is a clear proposal to which everybody agreed.

Chairman

We will clarify that in a moment in private session. I thank the delegates from the IFA, particularly Mr. Bryan. I wish him well in his post and assure him that I, as Chairman of the committee, will do my level best to assist him in this matter. I thank the delegates for briefing us so comprehensively on the issue. Their concerns will be raised with the Minister, Deputy Ó Cuív, at the meeting on 24 April when he comes before the committee to brief us on the national pensions framework. The delegates are welcome to sit in the Visitors Gallery for that meeting, in which case they should contact the clerk in advance with the names of those wishing to attend.

The joint committee went into private session at 11.55 a.m. and resumed in public session at 12.05 p.m.