Friday, 6 September 2019

Questions (1761)

John Lahart


1761. Deputy John Lahart asked the Minister for Employment Affairs and Social Protection the general rules for the treatment of farmers with regard to State pensions contributory and non-contributory; and if she will make a statement on the matter. [35046/19]

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Written answers (Question to Employment)

There are a number of payments and pensions paid by my department to people over State pension age. The State pension (contributory) is a PRSI based payment. It is not means tested and is paid from the Social Insurance Fund which in turn is financed by Pay Related Social Insurance (PRSI) contributions. Entitlement levels are largely based on such contributions. The maximum rate of payment is €248.30 weekly. Qualification for the scheme is based on a number of criteria including a minimum of 520 paid qualifying contributions. For those who have paid the required number and type of contributions at a reckonable rate – including Class S (self-employed) - they will be used in the calculation of their entitlements

A person aged over 66 with limited PRSI contributions over the course of their life may claim a State pension (non-contributory). This is a means-tested payment and the weekly rate payable is dependent on the means of each claimant. The maximum personal rate payable is €237 (over 95% of the maximum rate of the contributory pension). Account is taken in the means test of the value of property (other than the family home) and capital the person may have as well as cash income such as earnings from employment or self-employment, occupational pensions, foreign social security pensions and so on. This rate of payment does not include additional supports available, including rent allowance, household benefits or fuel allowance. Alternatively, if a person's spouse is a State pensioner, their most beneficial payment may be an Increase for a Qualified Adult, based on their personal means, and amounting up to 90% of a full contributory pension.

These arrangements apply to all claimants for the State pension (non-contributory) as well as other means-tested welfare schemes. The rules applying to the State pension (non-contributory) do not prohibit individuals engaging in any form of self-employment; it is the means available from the net profit from such self-employment (after allowing for expenses) which determines the rate of pension payable, if any.

The introduction of a Total Contributions Approach (TCA) to establishing the level of entitlement for all new state pension contributory claims was signalled by the then Government in the National Pensions Framework in 2010. At that time it set a target date of 2020 for the implementation of TCA. More recently, the Roadmap for Pensions Reform 2018-2023 targeted implementation of the TCA from Q3 of 2020. This is subject to the necessary legislation being enacted and supporting structures being in place.

Consultation is a very important part of the development and design of the new pension. With this in mind, I launched a public consultation on the design of the TCA on the 28th of May 2018 to which a wide variety of stakeholder groups were invited. A number of workshops were also held on the day to elicit views and feedback.

Shortly afterwards, Oireachtas members were invited to a detailed briefing by my officials in Leinster House. The consultation was open for over three months and the Department received almost 300 responses from individuals and organisations. Those submissions outlined the views of respondents on the issues of most interest to them including how self-employed people and Class S PRSI contributions since 1988 could be treated.

Having carefully examined the outputs of the consultation process, my Department is now designing the scheme and I intend to bring a proposal to Government setting out that design in the near future. When the Government has agreed the approach to be taken, I will initiate the work required to introduce this reform.

I hope this clarifies the matter for the Deputy.