The Farm Assist scheme was introduced in 1999 to provide income support for low income farmers. It replaced the former smallholders’ unemployment assistance payment. In line with the then existing arrangements for unemployment assistance (including smallholders) and pre-retirement allowance, the income of Farm Assist recipients was exempt from Class S PRSI for self-employed workers, and so they did not have to pay into the Social Insurance Fund at that time. Recipients of Farm Assist who had previously paid Class S social insurance had the option of paying voluntary contributions to maintain their social insurance record, including their entitlement to State Pension (Contributory), provided they satisfied the qualifying conditions.
Since 1st January 2007, the exemption from Class S PRSI has been removed and those receiving Jobseeker’s Allowance and Farm Assist are subject to Class S PRSI as self-employed contributors on their self-employed income, provided their annual income is €5,000 or more.
PRSI credited contributions (credits) are only awarded to former employees, to cover gaps in social insurance where they are not in a position to pay PRSI such as during periods of unemployment, illness, etc. Self-employed workers, whether farmers or self-employed in other sectors, do not qualify for credits.
The State Pension (Contributory) is a PRSI-based pension, financed by contributions made by current workers and their employers, and paid to pensioners, at a rate based upon their PRSI record when working. Those with few or no PRSI contributions paid over the years may alternatively qualify for the State Pension (Non-Contributory), which is a means-tested pension, financed by the Exchequer, and paid at up to 95% the maximum rate of the State Pension (Contributory). There are also significant disregards in the household means test for the State Pension (Non-Contributory). Alternatively, if their spouse has a contributory pension, they may qualify for an increase for a Qualified Adult (based on their own means), amounting up to 90% of a full rate State Pension (Contributory). The most advantageous payment for a pensioner will depend upon their individual circumstances.
I hope this clarifies the matter for the Deputy.