To qualify for an old age contributory pension a person must have: (1) entered insurance at least ten years before reaching pension age; (2) at least 156 contributions paid from April 2002, this will increase to a minimum of 260 paid contributions and to a minimum of 520 from April 2012; and (3) 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. The yearly average condition was reduced to ten contributions for the new pro rata old age contributory pension which came into force with effect from 21 November 1997. To qualify, a person with a yearly average of between ten and 19 must have 260 rather than 156 paid contributions.
It is acknowledged that the application of the yearly average test has led to particular difficulties for people who, for one reason or another, had gaps in their insurance records leading to a diluted yearly average. While the facility did exist for some people to maintain their record by becoming voluntary contributors, over the last decade successive measures have been introduced to alleviate some of these difficulties. These include: in 1997, the reduction of the minimum yearly average requirement from 20 to ten contributions per year, leading to a pro rata pension; the introduction, in 1994, of the homemaker provisions to cater for periods of time spent outside the workforce caring either for children or incapacitated people; the introduction in 1991 of pro rata pensions for people with mixed insurance records, the rate payable being in proportion to the periods of insurance completed at the rate appropriate for old age-retirement pensions, and the introduction, in 1988, of special partial old age pensions for people who entered compulsory social insurance in 1974 but who failed to qualify for a pension due to gaps in their insurance records between 1953 and 1974, due to the operation of the remuneration limit.
In addition, a new pro rata pension will be made available to those self-employed, aged 56 or over in April 1988 when social insurance for the self-employed was introduced and who have at least five years contributions paid since then.
I am aware that other issues still remain to be examined. As the Deputy will be aware, I have long stated my commitment to ensuring the most broadly feasible contributory pension coverage to as many categories as possible. With this in mind, my officials are undertaking a detailed review of the contribution conditions generally applying to the old age contributory and retirement pensions and I would hope to have a report on this in the first quarter of next year.
