Dáil Éireann díospóireacht -
Tuesday, 8 May 2001

Vol. 535 No. 4

Written Answers - Social Insurance.

Richard Bruton

Ceist:

219 Mr. R. Bruton asked the Minister for Social, Community and Family Affairs if he will consider introducing a scheme whereby persons who leave the public service in order to take up positions in the private sector, would be granted 12 months credits at Class A in the preceding contribution year, in order that a maternity claim or a sickness claim could be made at any time in the new employment; the estimated cost of making this concession; and if it proves costly, if he will consider offering this concession as an option offered to people based on a partial contribution towards the cost. [12726/01]

Minister for Social, Community and Family Affairs (Mr. D. Ahern)

Permanent and pensionable public servants employed before April 1995 are liable for PRSI Class D contributions. This is a modified rate of PRSI, that is, the combined employer and employee contribution rate is 5.25% as opposed to the standard Class A contribution of either 12.5% or 18%, depending on the level of weekly income. In return, Class D contributors are insured for a limited range of social insurance benefits – widow/er's and orphan's (contributory) pensions, bereavement grant and occupational injury benefits only, and the level of benefits available broadly reflects the level of contribution paid.

On leaving the public service to take up other employment in the private sector or self-employment, a former Class D contributor's PRSI status would change. For instance, they would become liable for the standard Class A PRSI contribution if they took up employment in the private sector or PRSI Class S contribution if they took up self-employment. Eligibility for benefits, such as maternity benefit and disability benefit, in this case would be determined in the same way as anyone else becoming insured for the first time at either Class A or S.

To qualify for short-term social insurance payments, a claimant must have paid a minimum number of contributions, 39 weeks, and demonstrate a recent attachment to the work force by having a minimum number of contributions in a recent tax year. More flexible conditions apply in the case of the maternity benefit scheme. For instance, a woman may also qualify if she has paid at least 39 contributions in the 12 months immediately before she commences her maternity leave. Data is not available on the number of former public servants who have left the public service to take up employment in the private sector and who subsequently fail to fulfil the contribution conditions for maternity or disability benefits. It is therefore not possible to cost the award of full credits to such persons for the relevant tax year. In any event, it should be noted that a potential claimant for the benefits in question would have to satisfy the basic contribution conditions which require a total of 39 contributions paid since entry into insurance and that the award of credits,per se, would not fulfil this condition. Furthermore, I consider that the introduction of a partial contribution towards the cost of such credits would have the effect of unnecessarily introducing more complexity into the social insurance system and would be contrary to the fundamental principles of social insurance. I am satisfied that the current contribution conditions applying to the maternity benefit scheme are reasonable and strike a fair balance between the interests of the average contributor and those of the average beneficiary. Accordingly, I do not propose to introduce any changes to the current arrangements.