asked the Minister for Social Welfare if his attention has been drawn to the anomaly in the Pay Related Benefit Regulations 1979 (S.I. 141, Par. 5(1) (a)) whereby a person who becomes sick in December 1987 is governed by the 1985-1986 tax year for pay related benefit purposes, whereas a person who becomes sick in January 1988 is governed by the 1986-87 tax year, and will generally receive higher pay-related benefit; whether he proposes to put pay-related benefit on the same footing as other benefits whereby the new benefits year come into operation for all claimants; and if he will make a statement on the matter.
Written Answers. - Pay Related Benefit Regulations.
120.
Section 19(1)(b) of the Social Welfare Consolidation Act requires a claimant for disability benefit to have 48 contributions paid or credited in the last complete contribution year before the beginning of the benefit year which includes the day for which benefit is claimed. The benefit year starts on the first Monday of January each year and the governing contribution year is the last complete tax year before the start of the benefit year. Thus for a person who claimed benefit in December 1987, the governing contribution year would be the 1985/1986 tax year whereas for a person who claimed benefit in January 1988 the governing contribution year would be the 1986/1987 income tax year. For administrative reasons it is necessary to have claims to benefit calculated on the basis of the last complete tax year before the year of claim because this is the latest year in respect of which full details of earnings and PRSI contributions would be available.
Paragraph 5(1)(a) of the Social Welfare (Pay-Related Benefit) Regulations 1979 (S.I. No. 141 of 1979) states that the relevant income tax year in relation to pay related benefit is the last complete income tax year before the beginning of the pay-related benefit year in which the first day of incapacity for work in a period of interruption of employment occurs.
For the vast majority of claimants to disability benefit the governing contribution year in which they must fulfil the contribution conditions for qualifying for payment and the relevant income tax year for pay-related benefit purposes coincide. However, in a small number of cases if a claimant does not qualify for benefit on application but continues to claim into a new benefit year, it can happen that he will satisfy the contribution conditions in the later contribution year and therefore be entitled to payment but the application of paragraph 5(1)(a) of SI No 141 of 1979 ties the determination of his pay-related benefit to the earlier tax year because that was the tax year which governed the benefit year in which he first became incapacitated. It should, however, be pointed out that in some cases the earlier tax year may be more favourable for a claimant, for example, if his earnings were higher in that year while he had much lower earnings in the later tax year. I will nevertheless have the matter examined to see if a more satisfactory arrangement can be achieved which would at the same time be administratively feasible.