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Farm Assist Scheme

Dáil Éireann Debate, Wednesday - 29 July 2020

Wednesday, 29 July 2020

Questions (23, 44)

Brendan Smith

Question:

23. Deputy Brendan Smith asked the Minister for Employment Affairs and Social Protection if insurance contributions will be credited to farmers for pension purposes for the time they were in receipt of farm assist; and if she will make a statement on the matter. [18806/20]

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Brendan Smith

Question:

44. Deputy Brendan Smith asked the Minister for Employment Affairs and Social Protection if insurance contributions will be credited to farmers for pension purposes for the time they were in receipt of farm assist, which caused a break in their insurance contributions records; and if she will make a statement on the matter. [18805/20]

View answer

Oral answers (7 contributions)

As the Minister will be aware, a cohort of people have reached, or are about to reach, pension age, and they have been paying social insurance contributions towards contributory pensions. Now they have found that because their insurance records were broken while they were in receipt of the farm assist payment, they are only entitled to reduced contributory pensions.

I believe that this is a small cohort of people. I am very anxious that those people who had to go on the farm assist payment because of reduced farm income should, for the periods they were in receipt of the payment, be given due recognition with contributions credited to their insurance record to ensure they are not all deprived of the full contributory pension.

I propose to take Questions Nos. 23 and 44 together.

Currently, PRSI-credited contributions or credits are awarded to former employees only, to cover gaps in social insurance where they are not in a position to pay PRSI contributions, such as during periods of unemployment or illness. Self-employed workers do not qualify for credits as one social insurance payment per annum provides the full 52 contributions for that year.

The farm assist scheme was introduced in 1999 to provide income support for low-income farmers. It replaced the former smallholder's unemployment assistance payment, in line with the then arrangement for unemployment assistance, including the smallholder's unemployment assistance and the pre-retirement allowance. The non-welfare income of farm assist payment recipients was exempt from the payment of class S PRSI for self-employed workers. Recipients of the farm assist payment who had previously paid class S social insurance contributions had the option of making voluntary contributions to maintain their social insurance record, provided they satisfied the qualifying conditions to do so.

Since 1 January 2007, the exemption from class S PRSI has been removed and those self-employed persons receiving jobseeker's allowance or the farm assist payment are subject to class S PRSI as self-employed contributors on their self-employed income, provided their annual income is €5,000 or more. Any self-employed person, including farmers, with an annual income of less than €5,000 can make voluntary contributions to maintain his or her social insurance record for pension purposes, once qualified to do so.

A person aged 66 or over with insufficient PRSI contributions to qualify for a full State contributory pension may claim a State non-contributory pension if he or she has an income need. The maximum weekly personal rate is €237, which is more than 95% of the maximum State contributory pension rate. While it is means-tested, there are very significant disregards to the benefit of claimants and a significant majority of such pensioners are paid at the full rate. I hope this clarifies the matter for the Deputy.

As the Minister quite rightly pointed out, the farm assist scheme was introduced in 1999. Deputy Ó Cuív, who is here, some others and I were strong advocates for changing the then smallholder's farm assistance payment because it was based on historical farm income. The farm assist scheme was quite rightly introduced to take account of present income circumstances. As we know, there can be a very sudden change in farm income circumstances, perhaps due to an outbreak of disease in a herd, a sudden drop in international prices for commodities or weather-related events, which can impact very severely on farm incomes.

The Minister mentioned the change in the PRSI exemptions in 2007. I am talking about the cohort of farmers between 1999 and 2007 who had a break in their insurance contributions due to availing of the farm assist scheme. They did not know that their record was broken. People generally understood that if someone went onto the social welfare payment, his or her insurance contribution would be maintained. I have spoken to accountants, predominantly small-scale ones such as the Minister would know from her two counties. They have said that in many instances, farmers came to them when they reached pension age and were horrified to learn that their insurance record was broken and that they did not have an entitlement to a full pension.

I believe, through my constituency work and from checking with other colleagues who deal with small-scale farm holders, that there is only a small number of people involved. They are being denied justice through not having the knowledge at the time or because they were never informed by the Department or the Revenue Commissioners that they needed to make a contribution while they were in receipt of the farm assist payment.

The farm assist scheme is absolutely essential. There are farmers who benefit from it and need it to put bread on the table.

I am absolutely committed to the scheme.

The Deputy is referring to a particular cohort of farmers who were in the scheme from 1999 to 2007 and I take his point. I am very new in this job but I would be happy to sit down with the Deputy and try to find some resolution. As he said, the number of farmers involved is not huge and I agree that they did not realise they had to make these payments. Some of them have visited my office. They did not have to pay tax so they may not have had an accountant to help them to send in returns and make contributions. I accept the Deputy's point. It would be useful if we could meet and examine the matter with my officials.

I welcome the Minister's approach. I would be glad to sit down with her and Deputy Ó Cuív to go through the particular lacuna in the legislation. This is a crunch time for this small cohort of people because they are approaching pension age. I hope we can make progress on the issue and ensure that these people are not denied their maximum pension contribution. As we know, they work very hard. In many cases, their incomes were below the living standard for many years, through no fault of their own. They worked very hard over the years and only availed of State assistance when absolutely necessary. Many were shocked to find when they reached pension age and filled out the forms that their insurance contribution records were broken.

I would be happy to examine this matter with Deputies Smith and Ó Cuív to try to find a resolution for this particular group of people. As I said, I am new to the job. Sometimes decisions made in one area can have unintended consequences in other areas. I will arrange the meeting as soon as we can. I thank the Deputy for raising this matter.

We will move to Question No. 25 as the Deputy is not here to ask Question No. 24.

Question No. 24 replied to with Written Answers.
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