I welcome the Minister and her officials. I ask her to make a presentation on the motion relating to the bilateral agreement on social security with Japan and members will then be able to ask questions. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official by name or in such a way as to make him or her identifiable.
Bilateral Agreement on Social Security with Japan: Motion.
I thank the Chairman for the invitation to discuss with the committee the motion for approval of the terms of the draft agreement on social security with Japan.
Ireland has bilateral agreements on social security with a number of countries. Most of these date from the early 1990s and are with countries with significant numbers of Irish emigrants, such as the USA, Canada, Australia and New Zealand. In these cases the most valuable aspect is the provision for aggregation of periods that are reckonable for pension where a person has been employed in both countries, under legislation in both countries, but where he or she has an inadequate record under one system in order to qualify for a pension. When a pension is payable on the combined record, the amount of Irish pension payable is calculated in proportion to the period of employment in Ireland vis-à-vis the combined period. An example of this is included in the briefing note my Department supplied to members.
The negotiation of this agreement with Japan was proposed by our embassy in Tokyo in the context of representations by businesses in both countries and in line with the objectives of the Government's Asia strategy. In addition to ensuring pension cover for workers moving between the two countries, the agreement allows posted workers — for example, managers or advisers sent to work in the other country in branch offices or subsidiary companies — to remain under the social insurance system of their sending country for up to five years. This agreement on social security will, therefore, add to Ireland's attractiveness for inward investment from Japan, which is still the second largest economy in the world. In the same way, it will also protect the continuity of cover for Irish personnel posted temporarily to Japan by Irish employers.
The reciprocal provisions of the agreement are similar to those in our existing agreements with other countries and follow a pattern widely used internationally. Only contributory benefits — the State pension, including transition pension, widow's and widower's pension, guardian's payment and bereavement grant — are covered.
As the agreement involves a charge on public funds, since Irish benefits arising from its application will be paid out of the social insurance fund, its terms must be approved by Dáil Éireann in accordance with the provisions of Article 29.5.2° of the Constitution. However, the number of pension claims arising from the agreement is expected to be small and the cost to the Exchequer is expected to be minimal.
The agreement will become operative three months after written notification is exchanged by both countries to the effect that all constitutional requirements have been satisfied. This will be done when the terms of the agreement have been approved by both Parliaments and when the necessary administrative arrangements are in place. The agreement will then be brought into force by means of a ministerial order.
I am accompanied by Ms Alice O'Flynn, assistant secretary, and Mr. Philip Melville from the EU-international unit of my Department. We will be happy to address any questions members may wish to pose in respect of the motion.
I propose that we approve the agreement.
I encourage the Minister to ensure that further such agreements, which are extremely important, be brought forward.
Well done, Minister.
The clerk has circulated a draft report on the motion. Is the draft report, with the names of members who contributed to the debate, agreed? Agreed.