Dáil Éireann Debate, Tuesday - 25 February 2014
383. Deputy Dara Murphy asked the Minister for Social Protection the reason persons seeking to set up their own registered business as a sole trader lose their entitlement to collect a weekly State transition pension; and if she will make a statement on the matter. [9127/14]
View answerIncreasing State pension age and the abolition of the State pension (transition) are steps that have been taken to ensure the sustainability of pensions into the future. The decision to reform State pension was taken in the context of changing demographics and the fact that people are living longer and healthier lives. These changes were provided for in legislation.
Social insurance contributions (Class S PRSI) were introduced for self-employed people on 6 April 1988. This provides cover for self-employed people for long-term benefits such as State pension (contributory) and widows/widowers pension (contributory). Self-employed people who pay class S PRSI contributions did not qualify for State pension (transition), and accordingly pay a reduced rate of contribution.
The State pension is a very valuable asset and it is important, therefore, that those who claim a State pension have paid sufficient PRSI contributions over a working life to benefit from State pension. The Actuarial Review of the Social Insurance Fund found that self-employed persons enjoy greater value from the payment of social insurance than employed persons, in particular, due to the lower rate of PRSI paid.
