Tuesday, 8 May 2018

Questions (449)

Bernard Durkan

Question:

449. Deputy Bernard J. Durkan asked the Minister for Employment Affairs and Social Protection the way in which it can transpire that between combined contributions from Ireland and the United Kingdom and being only short 19 contributions from the full amount required for a full pension, a person (details supplied) is only receiving a €10 pension per week; and if she will make a statement on the matter. [19943/18]

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Written answers (Question to Employment)

According to the records of my Department, the person concerned has a total of 129 reckonable paid contributions. A minimum of 520 contributions is required for entitlement to standard state pension (contributory) and a minimum of 260 contributions is required for entitlement to a mixed insurance pro-rata pension.

Under European Union regulations, a person’s social insurance record in one or more EU countries can be combined with their Irish social insurance record to determine entitlement to a pro-rata pension. A deciding officer has decided that the person concerned is eligible for an EU (mixed insurance) pro rata state pension (contributory), based on their Irish full and modified rate social insurance contributions, together with their EU social insurance contributions. The rate payable is calculated based on the proportion of Irish full-rate social insurance contributions to the person’s total social insurance contributions.

EU pro-rata pension entitlement is calculated by firstly establishing the person’s theoretical pension entitlement, by treating all the contributions as Irish and dividing that number by their number of years from start to end of employment. The person concerned has a total of 1,644 contributions (their Irish and EU contributions combined) over a 43 year period. This gives them a yearly average of 38. This gives them a theoretical weekly rate of pension entitlement (if all contributions were Irish) of €225.80.

As all contributions are not Irish, their EU pro-rata pension entitlement is calculated by multiplying their theoretical rate (of €225.80) by the number of their Irish contributions and dividing it by the number of their total contributions. In this case, the person concerned has 164 paid (and credited) Irish contributions, which, multiplied by €225.80 (the theoretical rate) and divided by 1,644 (the total number of their contributions), results in a theoretical EU pro-rata pension entitlement of €22.53. This rate is then multiplied by 164 (the number of paid and credited contributions) and divided by 522 (the total full-rate paid Irish and UK contributions). Rounded up, this gives a pro rata pension entitlement of €7.10 per week. Following the budget increase of 30 March 2018, this amount increased to €10.00 per week.

The greater the number of Irish contributions paid by a person, the higher their weekly rate of Irish EU pro-rata pension entitlement. In many cases a person is also entitled to a second (or more) pro-rata pension entitlement from other countries based on their social insurance contributions paid outside Ireland.

I hope this clarifies the matter for the Deputy.