Olwyn Enright
Question:81 Deputy Olwyn Enright asked the Minister for Social and Family Affairs when she will proceed with the reform of the pension system; and if she will make a statement on the matter. [2059/10]
View answerTuesday, 19 January 2010
Questions (14)
Oral answers (16 contributions)
The Green Paper on pensions outlined the challenges facing the Irish pensions system in the years ahead, including the sustainability of the system over the longer term in light of demographic change and the adequacy of contribution levels and benefits. The consultation process that followed publication of the Green Paper reflected the wide range of views and interests held by individuals and organisations throughout the country. While there was no consensus on ways to respond to the challenges facing our pension system, it was clear that there were significant issues and problems that people wanted addressed.
Since the Green Paper was published in October 2007, the economic environment has changed considerably and the Government needs to ensure that any decisions we make in the pensions area will be robust enough to withstand the challenges that will arise in the future. We must make decisions now to ensure the adequacy of retirement incomes for this and future generations and, at the same time, develop a system that is affordable and sustainable for the State and for those who sponsor and provide pension schemes.
In the past 18 months or so the Government has taken a number of steps to respond to the immediate difficulties facing pension scheme members, particularly members of defined benefit schemes. These include the establishment of a pensions insolvency payment scheme and a reordering of wind-up priorities so that, in any defined benefit wind-up situation, employees and former employees who have not yet retired may still receive a large proportion of their benefits. Legislation to support these measures was passed in the Social Welfare and Pensions Act 2009. The Government has also introduced provisions to allow for more flexible restructuring of pension benefits and stronger regulation regarding remittance of pension contributions. We have also protected people in receipt of the State pension by retaining the rates of pension and other social welfare payments for older people in the recent budget.
The Government is aware that the wider and longer-term pensions policy issues require a comprehensive and co-ordinated response and has been considering a number of options to address the challenges facing our pension system. Uncertainty in the economic climate has increased the complexity of the decisions we must make but it does not prevent or deter the Government from making these vitally necessary decisions. However, it does require us to give very careful consideration, and it is precisely because the development of the national pensions framework involves decisions on such a wide range of future and complex issues that we have been spending a considerable amount of time working on it. The Taoiseach and the Minister for Finance have indicated that we hope to be in a position to publish the framework shortly.
Every month we ask this question and we hear that it will be published shortly. What does shortly mean? We attended a Green Paper launch by the Minister for Social and Family Affairs, although I do not know whether Deputy Cullen or Deputy Hanafin was Minister at the time.
Not I.
He obviously made an impact. We were told it would be published very shortly but that was almost two years ago. Does the Minister have any idea when this will be published? A piecemeal approach is being taken at present, as outlined by the Minister, in respect of PIPS and other matters addressed in the budget. The latest step by the Department concerns farmers' spouses' pensions. The Department allowed farmers' spouses to apply and back pay contributions if they had not paid them by the time they were 66 under the Social Welfare Consolidation Act 2005. Over the past number of weeks and months——
The Deputy should ask a question.
I must explain it so the Minister is clear.
The time is nearly up.
The Department wrote to at least 200 farm families to ask them to repay the money, which the Department allowed them to pay into this scheme. Why has the Minister made this move? How many farm partnerships are affected? Will she give consideration to allowing them to retain the pension the Department allowed them to pay into?
This is a specific question——-
It is relevant to the question.
——and an Adjournment debate may be allowed on this matter later.
It is a question on pensions and I anticipated it. There is no change in policy in respect of commercial partnerships and there is no change of budget in respect of commercial partnerships. Approximately 1,000 people applied for partnership under the scheme by showing that they were in partnership with their spouses. Generally, it refers to farm spouses. Of those 1,000 people, 579 cases have been decided on the basis of whether they qualify as a partnership. Some 508 of those were deemed to have a partnership in existence. Of those, 268 have applied for a pension. The rest have not reached pension age yet. These are people who qualify for the partnership and have applied to see if they qualify for a pension. Some 46 did not qualify because of the social insurance element. Some 87 were told they qualified, were put into payment but then it was discovered they did not qualify. We are talking about 87 individuals. This occurred because of an administrative mistake by the Department and I regret that it was made. Some 135 people out of 268 are in receipt of a pension. These are the accurate figures. Letters were sent by the Department last week that caused some distress to the people concerned. I regret the administrative mistake was made.
How was a mistake like that made when the Department worked out how much people would pay back? People borrowed money in some instances to be in a position to apply to the Department. The Department knowingly allowed them to do that and people thought they were entitled to the pension. They planned accordingly and now the Department is writing to them to say that they are not allowed get it and that it was an administrative error. If the administrative error had been made on the other side, the Minister would be acting tough to get it back. This must be re-examined because it is extremely unfair to those who planned on the basis of information provided by the Department.
There are two elements to this pension. In the first instance, people must prove that the partnership existed and then people must qualify under social insurance contributions. The section that determines whether a partnership existed did not communicate properly with the social insurance end. When the partnership was found to exist and the application was approved in respect of this, it was presumed to be approved for a pension. It was a genuine mistake and I regret that it happened. It happened in respect of 87 people, not hundreds, but it is a serious issue for those 87 people.
The data matching is not as good as the Minister said earlier.
We now move on to Other Questions and the first question is in the name of Deputy Olwyn Enright, who was fortunate in the draw.