As I have already informed the House, my Department has recently set up a working group on social insurance which comprises representatives of the IBEC, ICTU and the community and voluntary pillar as well as officials from my Department. The purpose of the group, which meets for the second time later this week, is to examine issues relating to the ongoing development of the social insurance system as it relates to employed contributors. This will include an examination of the degree and types of social insurance cover provided to existing employee contributors as well as the possibility of providing and financing new benefits under the system.
In this regard, the group will be giving consideration to the possible introduction of social insurance benefits for insured persons who have to temporarily leave the workforce to care for children or incapacitated persons. Such benefits could include a carer's benefit which is being examined as part of my ongoing response to the 1998 review of the carer's allowance which provided the basis for the Government's £18 million package of measures for carers introduced in the 1999 budget. The group will focus on the appropriateness of the current social insurance system, including funding arrangements, in the context of a rapidly changing economic and social environment. It is hoped that the deliberations of the group will inform all parties on the issues involved and explore the level of consensus among the social partners involved as to future priorities.
The fundamental principle of social insurance is that employees, their employers and the self employed make social insurance contributions while economically active. These contributions are used to pay the pensions of retired contributors and short-term benefits such as unemployment and disability benefits to contributors who are temporarily out of the workforce. While persons working in the home are not compulsorily covered by the system there are a number of arrangements in place which cater for the position of former contributors who have had to leave the workforce for homemaking purposes, including the care of children and incapacitated persons, or for other reasons.
Former contributors who cease to be compulsorily covered by social insurance can opt to become insured on a voluntary basis and pay voluntary contributions. These contributions provide continuing cover for the pensions which the employee or self-employed contributor was covered for when working. This option is available to all former contributors, subject to certain conditions, who are working in the home or are outside the formal workforce for some other reason.