Dáil Éireann díospóireacht -
Tuesday, 5 Nov 1996

Vol. 471 No. 1

Written Answers. - Social Welfare Benefits.

Séamus Hughes

Ceist:

204 Mr. Hughes asked the Minister for Social Welfare the reason a person who gave up work in 1988 to have a family and returned to the workforce in December 1994, and who now has health problems preventing her from working, is not entitled to any social welfare benefit on the basis of inadequate paid contributions for the previous four years in spite of the fact that she has sufficient credited contributions and having regard to the fact that her health problems are indirectly related to her having had a family. [20418/96]

Minister for Social Welfare (Proinsias De Rossa)

The contributory benefit schemes for persons who are unable to work because of illness are disability benefit and invalidity pension. Under social welfare legislation, to qualify for disability benefit a person must satisfy certain contribution conditions. One of the conditions is that the person must have at least 13 paid contributions in a recent contribution year. This is to ensure that people claiming disability benefit have a recent attachment to the workforce. According to the records of my Department, the person concerned had three paid contributions in the 1994-95 contribution year and prior to that her last paid contributions were in 1987-88.

To qualify for invalidity pension a person must be permanently incapable of work, have at least 260 paid contributions and 48 paid or credited in the last tax year before the date of claim. The person concerned has a total of 103 paid contributions. A person who does not satisfy the contribution conditions for social insurance payments may apply for a social assistance payment where they are in financial need. The relevant schemes in this case would be either disability allowance, which is a social assistance payment in respect of long-term incapacity for work, or supplementary welfare allowance.

Cecilia Keaveney

Ceist:

206 Cecilia Keaveney asked the Minister for Social Welfare whether persons who pay a large number of stamps during their working life but fail to qualify for a contributory pension due to, for example, a break in contributions, should be entitled to a lump sum amounting to the stamps paid or a percentage of the stamps paid as opposed to having no return for the money paid; and if he will make a statement on the matter. [20431/96]

Minister for Social Welfare (Proinsias De Rossa)

Social insurance by definition includes features of State income maintenance schemes, based on the principle of solidarity. The social insurance system as it has evolved in recent decades has a strong solidarity component. The social insurance system is not however insurance in the fully commercial or actuarial sense. The fact that an individual does not satisfy the qualifying conditions for a particular scheme does not mean that they should automatically receive a refund of their contributions.

To qualify for an old age contributory pension a person must have entered insurance at least ten years before reaching pension age, have at least 156 contributions paid and have a yearly average of at least 20 contributions, or 24 in the case of a retirement pension registered since January 1953, when the unified system of social insurance came into effect, or the time they started insurable employment, if later.

In relation to entry to the system at least ten years before pension age this condition has been a feature of the scheme since it was introduced in 1961 and its objective is to link entitlement to pension with a reasonable level of contributions to the social insurance fund.

All persons who enter social insurance for the first time after age 56 are entitled to a refund of the old age pension part of their contributions provided that they do not qualify for such a pension either contributory or non-contributory.

The yearly average condition gives rise to particular problems for people with gaps in their insurance records. While a number of these problems have been addressed by my Department in recent years the National Pensions Board (NPB) report Developing the National Pension System recommended aprorata pension scheme, which, in its view, would resolve the problems arising from gaps in coverage in a more comprehensive way.

The NPB report recommended,inter alia, a wider range of pro-rata pensions related to the average number of contributions over an insured's lifetime, where, for example, an average of 45 or over, as against 48 at present, would qualify a person for the maximum rate of pension while a minimum 30 per cent of full rate pension would be payable for an average of ten to 14 contributions. It also recommended that the number of paid contributions to qualify for retirement and old age contributory pension be increased from 156, three years, to 520 contributions, ten years. As such proposals could lead to a reduction in entitlement for future pensioners, when compared with present arrangements, they have to be evaluated very carefully.

The report and the recommendations are at present being studied within the Department with a view to bringing forward proposals on the issues addressed in the report, taking account of the pensions funding issues.