I propose to take Questions Nos. 23, 16 and 60 together.
The persons concerned were liable for social insurance contributions at a modified rate which covered them for widow's and orphan's pension and deserted wife's benefit. They were not covered for retirement and old age contributory pension on the grounds that they were covered under their company pension scheme.
Prior to becoming salaried staff of the company they would have been paying social insurance contributions at the standard rate and covered for the full range of social insurance benefits, but their entitlement to retirement and old age contributory pension would depend on whether they have a sufficient number of contributions at the standard rate prior to becoming salaried staff to qualify them. Representations have been made that special arrangements should be made to cover the situation of persons who do not qualify for social insurance pension in this situation.
The arrangements made in section 30 of the Social Welfare Act 1988 relate to a specific group of people who were removed from social insurance cover prior to 1974 because of the operation of the remuneration limit for social insurance and who came back into insurance in April 1974 when the limit was abolished. These arrangements do not cover the situation of persons with gaps in insurance as a result of moving from full to modified social insurance cover. This is an inevitable feature of any system where there are different levels of cover for people in different types of employment. The whole question of the level of pension cover under the social insurance system and the appropriate relationship with occupational pension schemes will be examined by the National Pensions Board in the context of their examination of pensions policy as a whole and the problem of "mixed" insurance will be considered in that context.
The Commission on Social Welfare recommended that persons in this situation should be granted pro rata pensions on similar lines to people affected by the remuneration limit subject to an overall limit on the total pension payable. This was proposed, in the context of the Commission's recommendation that all employed persons, including public sector employees, should in future be fully covered for social insurance pensions. Information on the cost of applying the recommendations of the Commission in this area is not available as there are no firm figures on the numbers of people affected now or likely to be affected in the future.
The provision made in the Social Welfare Act, 1988 for people affected by the remuneration limit will result in an additional cost of over £2 million a year in the initial years and a total cost, over a 30-year period, of some £22 million at current rates. Some 1,250 people will benefit under the arrangements.
