Vol. 511 No. 1
30 Mr. Durkan asked the Minister for Social, Community and Family Affairs if he will extend pro rata pensions to those in the self-employed and the PAYE sectors who have less than five full years' contributions; and if he will make a statement on the matter. [23652/99]
The same qualifying conditions for the old age contributory pension apply to all insured people, both employees and self-employed. These qualifying conditions require a person to fulfil the following three criteria. First, the person must have entered social insurance at least ten years before reaching pensionable age, which is 66. Second, the person must have a minimum of 156 contributions paid. In line with the recommendations of the Pensions Board, this requirement will increase to 260 and 520 paid contributions from April 2002 and April 2012, respectively. Third, the person must have a yearly average of at least ten contributions paid or credited from 1953, when the unified system of social insurance came into effect, or the date of entry into social insurance, if later, and at least 260 contributions paid. The reduction in the yearly average requirement from 20 to ten contributions was introduced in November 1997, leading to a pro rata old age contributory pension. Where a person has a yearly average of between ten to 14 contributions, he/she is entitled to a pension rate at 50% of the standard maximum rate while those with averages of between 15 to 19 receive a pension rate equivalent to 75% of the standard maximum rate.
Alternatively, where a person fails to satisfy the second and third qualifying conditions set out above, he or she may qualify for a mixed insurance pro rata pension if a mixture of full rate and modified rate social insurance contributions have been paid.
The pension arrangements to which the Deputy refers were introduced last April, in line with the Government's commitment to extend contributory pensions coverage to people who narrowly failed to qualify for a pension. These relate to a specific group of people, namely, self-employed people who were 56 years of age or over in April 1988, when social insurance was extended to the self-employed, and who, through no fault of their own, could not qualify for a pension as they did not satisfy the standard requirement of having entered insurance at least ten years before pension age.
An old age contributory pension is, therefore, now available to those self-employed people who were aged 56 or over in April 1988 and who have at least five years' contributions paid since then. The rationale behind this five years' paid contribution condition is to ensure that entitlement to a pension is limited to those who have made some reasonable level of contributions to the social insurance fund during the course of their careers. Payment is at a flat rate of 50% of the standard maximum rate with equivalent increases for adult and child dependants, where applicable. The pension is not being extended to employees as that group is not in the same insurability position as the self-employed group.
I consider these arrangements to be fair, reflecting, as they do, a certain consistency of commitment to the social insurance fund and I have no plans to change this particular pension arrangement for the groups mentioned by the Deputy.
It is 4.15 p.m. but I will allow a brief supplementary from Deputy O'Keeffe.
I know a Cork farmer who has missed out on that 50% pension by four days. Does the Minister agree that the 50% pension provision was not the pro rata pension provision which it was claimed to be; that this sort of anomaly and injustice would not have arisen if he had introduced a pure pro rata pension provision for those who were forced to make contributions, being over the age of 56, when the scheme was introduced; and that there are still quite a number of people who are suffering from this injustice?
Before you reply, Minister, I will allow Deputy Ring to ask a supplementary question also.
In fairness to the Minister who rarely receives praise from me, he went half way. There were people who were caught in this scheme.
A brief supplementary question, please.
Christmas is approaching and we heard the speech about what the Government did. Why not go further to the extent of the other 50% and include these people? They paid their contributions in good faith. It will not cost the Government a fortune. I ask the Minister to consider doing that for these elderly people as a gesture for the millennium. They thought they would receive a pro rata pension. Will the Minister do it for Christmas and the millennium?
If we were to accept the proposal in the question anybody who ever paid any type of PRSI would get a pension.
No.
That is not the system and it has never been the system.
No, the scheme.
Please allow the Minister to answer without interruption.
With regard to the five years' contributions aspect, Deputy O'Keeffe complimented the Government on what it did in that respect and now he is coming in here and saying that cases were left out. Either he did not under stand what we were doing or he just went along with it.
It was better than nothing.
The reality is everybody knew that, no matter where one drew the line, if one moved back the goal posts, there were always going to be people who were going to be left out of this scheme. This was done against the advice of the Department which felt that we should not change the ten year rule. This was done, purely and simply, because I and the Government insisted that we wanted to do something to fulfil the commitment, which we made in our election manifesto prior to coming into office, to look after those people who, through no fault of their own, had failed to meet the ten year requirement. We did that.
The Minister did half did it.
The best balance we could come up with was bringing it back from ten to five years. That scheme is accepted by the vast majority of people. I fully accept there are people who do not have five years' contributions but that was always going to be the way.
Written Answers follow Adjournment Debate.
