Dáil Éireann Debate, Tuesday - 26 January 2016
123. Deputy Catherine Murphy asked the Tánaiste and Minister for Social Protection why a person (details supplied) was not informed when commencing payment of pay-related social insurance contributions at the age of 59 years that the person would be ineligible for a State contributory pension on reaching the relevant age; if a person's work as a homemaker is covered under the homemaker's scheme; and if she will make a statement on the matter. [3217/16]
View answerThe State pension contributory is a very valuable benefit and is the bedrock of the Irish pension system. Therefore, it is important to ensure that those qualifying have made a sustained contribution to the Social Insurance Fund over their working lives. To ensure that the individual can maximise their entitlement to a State pension, all contributions paid or credited over their working life from when they first enter insurable employment until pension age are taken into account when assessing their entitlement and the level of that entitlement.
There are a number of conditions which must be met in order to qualify for a State (contributory) pension. One of these is that a minimum number of reckonable contributions have been paid by the claimant since entering insurable employment, before they reached pension age. Previously the number of paid reckonable contributions required was 260. However, Section 12 of the Social Welfare Act 1997 increased this to 520 contributions, with effect from April 2012, and this has applied to new claimants from that date. Another condition is that a person should start paying social insurance before age 56.
I understand that, according to the records of my Department, the person concerned first became liable for PRSI in 2006, shortly before her 61st birthday, approximately 5 years (or some 266 weeks) before she reached State pension (contributory) age of 66 in February 2011. I understand that officials in my Department have disallowed claims from her to State pension (contributory) on three occasions since then. On the first occasion (10 January 2011), her disallowance was on the basis that there was PRSI outstanding. It is not possible for claims to be processed and put into payment in such circumstances. Her second disallowance issued on 22 February 2011. This decision stated that she did not enter insurance before 56 years of age, and she did not have 260 paid contributions. Her third disallowance, on 23 May 2011, re-stated that she did not enter insurance before 56 years of age (I understand additional contributions had been awarded since her second disallowance).
The conditions for entitlement to social protection benefits are not fixed, and legislation may be passed by the Oireachtas to vary the basis upon which someone may qualify for such a pension. This applies to all such benefits. My Department does not, therefore, contact people entering insurable employment or self-employment, to advise them of their future entitlement (or non-entitlement) to a pension or any other social protection payment, as to do so may create expectations which might not apply. Nor is it the case that, where a person has an outstanding PRSI liability, that they are offered comprehensive advice as to what benefits they may attract if they pay the money owed. The position, generally, with PRSI is that it must be paid as set out in legislation, regardless of whether it will result in a benefit or not.
The existing conditions for State pension (contributory) are, however, widely disseminated, not just by my Department through leaflets and on its website, but also by the national network of Citizens Information Centres. Self-employed contributors may also be advised of the current position by their accountants, if they are financially planning for their retirement.
The home-maker's scheme makes qualification for a higher rate of State pension (contributory) easier for those who take time out of the workforce for caring duties. However, this scheme does not involve the award of paid or credited contributions, and if a person does not satisfy the general conditions to qualify for a pension, such as the age of entry into social insurance, this scheme will not assist in meeting that qualification.
Where people who were unattached to the labour market during most of their adult lives cannot qualify for a contributory pension in their own right as they have paid few or no contributions, or cannot qualify for a full rate as a result of an intermittent PRSI record, the social protection system provides alternative methods of supporting such pensioners in old age. Therefore, if their spouse has a contributory pension, they may qualify for an Increase for a Qualified Adult amounting up to 90% of a full rate pension, which by default is paid directly to them. Alternatively, they may qualify for a means-tested State Pension (non-contributory), amounting up to 95% of the maximum contributory pension rate.
