I move:
That Dáil Éireann approves the terms of the Agreement on Social Security between Ireland and the United States of America which was signed in Washington on 14 April, 1992, and which was laid before Dáil Éireann on 26 March, 1993.
In accordance with Article 29.5.2º of the Constitution, I seek the approval of Dáil Éireann to the terms of the Bilateral Agreement on Social Security between Ireland and the United States of America. The purpose of the agreement is to safeguard the pension rights of Irish workers who move to the US to work and to protect US workers who come to work in Ireland. The agreement will benefit thousands of Irish emigrants to the US. Many would have worked and paid social insurance contributions in Ireland for lengthy periods. Usually any social security rights they had accumulated in Ireland were forfeited once they emigrated. This agreement will mean that these social security rights can be used together with their US social security rights to qualify them for a pension whether they choose to remain in the US or come home to retire. It will mean that our emigrants to the US will have the same protection of their social security rights as workers who move within the EC.
This is the most important agreement on social security which Ireland has entered into since we joined the EC in 1973. It will have a major impact because of the huge numbers of Irish workers who have emigrated to the US in search of work. According to the US Department of Health and Human Services, an extra 1,100 US pensions will become payable to Irish people who have worked in the US and most of whom have returned home. This will generate additional income of approximately $1 million to the State. My Department has estimated that around 400 people will qualify for Irish pensions immediately the agreement comes into force. The number of pensioners will increase over time as the benefits of the agreement come into effect for our more recent emigrants. The US is already paying around 6,100 pensioners living in Ireland most of whom are returned Irish emigrants. The annual value to the State of these pensions is $35 million. My Department is currently paying 200 Irish pensions in the United States. These would be pensions which the people qualified for because they had sufficient contributions paid either in Ireland or the US to qualify.
The agreement with the US covers the following Irish benefits: old age contributory pension, retirement pension, invalidity pension, widow's contributory pension, orphans contributory allowance and death grant. In the US the following benefits are covered: retirement benefits, survivor's benefits, disability benefits and family benefits for retired or disabled workers. The agreement will apply in cases where a person has insufficent contributions to qualify for any of these benefits under the laws of one or other of the two countries. Where a person has an independent domestic entitlement there will be no need to invoke the provisions of the agreement because their independent domestic entitlement is likely to be more favourable.
The agreement will operate by allowing, for example, periods of social security contributions paid by a person while working in the US to be taken into account for an Irish pension as if they were periods of Irish PRSI. The amount of pension payable will be based on the total number of years in which the person was employed in Ireland pro rata to the combined work period in both countries. Most people who worked in both countries will qualify for two pro rata pensions, one from each country. A similar method of calculation will be used by the US authorities.
A further provision of the agreement will benefit Irish workers posted to the US temporarily and US workers sent here by their parent company on the same basis. When the agreement comes into operation such a worker will only be subject to the social security laws of one country. It will mean that Irish workers posted to the US will continue to pay PRSI contributions here and retain their rights to full Irish benefits and will also be exempted from paying any social security taxes in the US. Similarly, US workers will remain attached to the US social security system for up to five years.
The claiming arrangements under the agreement have been kept simple. A person living here can apply directly to my Department to have his US entitlement examined. We will take it from there. We will send the claim to the appropriate US authority and find out any further details they might need. A US resident can apply to the US authorities about his or her possible Irish entitlement. The pensions will be paid by each country separately.
Some years ago, I took the initiative of extending the free schemes to EC pensioners and people receiving pensions under bilateral agreements. When this agreement comes into operation Irish people with US pensions living here will also become entitled to free electricity, TV licence and telephone rental allowance. As a result of the agreement 3,500 US pensioners living here will for the first time qualify for the free electricity concession and some 1,800 will qualify for the free TV licence and telephone rental. These concessions will be extended to them immediately the agreement comes into operation.
In effect this will be a pension protection network for Irish workers. It is the fourth social security agreement to protect workers' pension rights which I have concluded since I started with the Ireland-Austria agreement in 1989. My objective is to extend to our emigrant workers the same level of protection as they would have, if they worked within the EC.
The potential benefit this type of protection has for our young workforce is enormous. It means that mobility is a practical proposition for them because their future pension entitlements are secure. There are 8,500 people receiving either old age, retirement or widow's contributory pensions on foot of a combination of social insurance contributions in Ireland and other EC states. This number will go further as the next generation becomes increasingly mobile.
We have agreements in place with Austria, Canada and Australia. I will sign agreements with New Zealand and Quebec later this year. Negotiations are underway at official level with the United Kingdom in respect of residents of the Isle of Man and the Channel Islands, who are not covered by the EC regulations.
A European Economic Area (EEA) Agreement is expected to come into force later on this year to bring nationals of the former EFTA States (except Switzerland), that is Austria, Iceland, Norway, Sweden, Finland and Liechenstein, within the same social security legal framework as EC nationals. Any Irish workers who are in these countries will, therefore, have all their social security rights fully safeguarded once the agreement becomes operative.
Negotiations are also underway on a separate bilateral agreement between ourselves and Switzerland. When all of these agreements are in place we will then have a network of agreements with 21 different countries. This network represents a major protective safety net for all our emigrant workers. It will mean that when they reach pension age their pension rights will be secured and they will suffer no reduction or loss of their entitlements because their working careers are spread over a number of different countries. I regard these agreements as fundamentally important in my overall pension strategy.
I have seen at first hand the very positive attitude of our emigrants towards the Canadian and Australian agreements and I met with and had lengthy discussions with representatives of Irish groups and associations in these countries when I signed both of these agreements. The agreement we are discussing here today has generated a huge amount of interest both here and in the United States. Its introduction will be warmly welcomed and appreciated by many thousands of Irish workers in both countries. I will be exploring the possibility of extending the number of countries with whom we have agreements when the present phase is completed.
Deputies will be aware of my determination to ensure that the pension rights of the half million members of occupational pension schemes are secure. The Pensions Act which I introduced in 1990 to provide safeguards for such pensions is still the foremost legislation of its kind in Europe. To ensure that the same kind of protection can be given to Irish members of overseas-based pension schemes, I took powers in the Social Welfare Act, passed last week, to enable me to pursue, with other countries, agreements which would afford these workers the standard of protection for their pension rights which is laid down in our Pensinos Act.
This is an important agreement for Irish workers and their families who have spent some of their working career in the United States. It will bring them considerable benefits by way of pensions which they could not have qualified for previously and also a range of entitlements under the free schemes. This initiative will be warmly welcomed by Irish emigrants both in Ireland and in the US. They will see in it a recognition of their needs and welfare. We value the contribution which they have made to the development of the country of their birth and the country to which they emigrated.
I learned this morning that the United States Congress has now approved the agreement and this means that the operative date will be 1 September.
I strongly commend this motion to the House.