Dáil Éireann Debate, Wednesday - 15 December 2004
58 Mr. Neville asked the Minister for Social and Family Affairs if a partial contributory old age pension will be awarded to recipients who have less than ten years contribution in relation to the number of years contribution between five and ten years in replacement to the present situation of a maximum of 50% pension. [33314/04]
View answer171 Mr. Durkan asked the Minister for Social and Family Affairs if he intends to improve entitlement to pensions in respect of self-employed contributions; and if he will make a statement on the matter. [33777/04]
View answer172 Mr. Durkan asked the Minister for Social and Family Affairs the number of persons who have been refused contributory pensions on the basis of insufficient contributions; if he intends to address the issue; and if he will make a statement on the matter. [33778/04]
View answer173 Mr. Durkan asked the Minister for Social and Family Affairs if he will consider introducing measures to enhance the entitlements of those who are a low rate of pension due to lack of adequate contributions; and if he will make a statement on the matter. [33779/04]
View answerI propose to take Questions Nos. 58, 171, 172 and 173 together.
The qualifying conditions for contributory old age pensions require a person to have paid at least 260 contributions at the appropriate rate, enter insurance ten years before pension age and achieve a yearly average of at least ten contributions paid or credited on their social insurance record from 1953, when the unified system of social insurance came into effect, or the date of entry into insurance if later. The minimum yearly average required for a retirement pension is 24 contributions and, in both cases, an average of 48 is required for a maximum rate pension.
Approximately 5,700 applications for standard rate retirement or old age contributory pensions were refused in 2003 because the persons concerned did not have sufficient contributions. However, those refused payments may subsequently qualify for a pro rata pension under EU or mixed insurance provisions. Also, people who cannot meet the average contribution test for a retirement pension may be able to meet the less stringent conditions for the old age contributory pension.
The conditions are intended to ensure that those qualifying for contributory pensions have had a reasonable association with the social insurance system over their working lives and that the payment they receive reflects, as far as possible, their overall contribution to the system.
A number of measures have been introduced in recent years to provide minimum pensions for people who would otherwise not receive a payment. In 1997, the average number of contributions required for the old age contributory pension was reduced from 20 to ten. Also, special pensions were introduced to deal with perceived anomalies in relation to pre-53 insurance and for self-employed people who were over 56 when that group became compulsorily insured in 1988. These pensions, which are based on payment of just 260 contributions, are paid at 50% of the standard rate.
As already indicated, pro rata pensions are available in cases involving insurance at different rates and where contributions have been made in other EU countries and countries with which Ireland has a bilateral agreement.
In considering changes to the system, it is necessary to uphold the contributory principle which underpins entitlement. This requires that people meet a minimum contribution threshold and also that payments, as far as possible, reflect the level of contribution which individuals make. In this regard, I consider that the range of pro rata and special pensions that are available gives adequate recognition to the level of contributions which individuals have made. Of course, the old age non-contributory pension is also available and may be more advantageous to someone with limited means.
Further developments in qualifying conditions will be considered in the light of phase two of the report on the qualifying conditions for old age and retirement pensions which is due for publication in the new year.
59 Mr. Howlin asked the Minister for Social and Family Affairs if his attention has been drawn to companies that are failing to fulfil their legal obligation to allow staff to open a PRSA account; if so, the steps he is taking to ensure that these obligations are being fulfilled by all employers; and if he will make a statement on the matter. [33449/04]
View answerUnder section 121 of the Pensions Act 1990, all employers are required to enter a contract with a PRSA provider so that access to at least one standard PRSA is available for all employees without access to an occupational pension scheme. These requirements came into force on 15 September 2003. At end September 2004, 66,486 employers had signed up with a PRSA provider under the requirements.
Responsibility for ensuring that employers are complying with their obligations in this regard rests with the Pensions Board. The board has in place a PRSA compliance strategy. As part of this strategy random audit letters are being issued and the board is also following up on whistleblow reports it receives from employees and other interested parties. To date, I understand that it has dealt with 345 cases in this way and 85% have been settled to the satisfaction of the board.
The board has also examined a database of over 170,000 employers and identified 64,000 who may not be complying with the legislation governing PRSA access. The board issued letters to these employers in September last and to date almost 50% have replied. These responses are being currently analysed and I understand that they show a high degree of compliance. Replies which are outstanding are being followed up and, in this regard, legal proceedings have been initiated against a number of employers for failing to respond to the board's inquiries.
My Department is also assisting the Pensions Board in identifying employers who are not complying with the legislation. The Social Welfare Act 2004 gives social welfare inspectors the power to make inquiries in relation to PRSA compliance while visiting employers in connection with PRSI matters. Following a comprehensive nationwide training programme of all inspectors completed in September 2004, these inquiries are now being made and reports submitted to the Pensions Board.
I am satisfied that the control measures put in place by the Pensions Board and my Department should ensure a high level of compliance by employers with PRSA legislation. If the Deputy has a particular case that he would like investigated, he should make the details available.
