Dáil Éireann díospóireacht -
Wednesday, 24 Apr 2002

Vol. 552 No. 4

Written Answers. - Pension Provisions.

John Gormley

Ceist:

128 Mr. Gormley asked the Minister for Social, Community and Family Affairs if his Department is in receipt of a letter dated 12 April 2002 from a person (details supplied) in Dublin 4; if he will comment on the views expressed therein; and if he will make a statement on the matter. [12752/02]

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

My Department has received the letter to which the Deputy refers and will be writing directly to the person concerned in relation to its content.

The position is that entitlement to old age contributory pension depends, among other things, on the person's insurance record from the date of entry into insurance to the end of the contribution year immediately before the age of 66 years.

The person concerned received a pension forecast in September 2000. Under the legislation then applicable, her yearly average of contributions would have been based on the 47 years up to the end of March 2001, the end of the last complete contribution year before she reached 66 years. This would have given a yearly average of 15 and a 75% pension. This correspondence indicated that a pension forecast is not a statement of statutory entitlement and that changes in the person's contribution record or in the relevant legislation can affect the forecast.

Austin Deasy

Ceist:

129 Mr. Deasy asked the Minister for Social, Community and Family Affairs his plans to allow persons who applied for the self-employed old age pension, but due to their income do not have to pay any contributions, pay contributions back-dated to enable them to qualify; if his attention has been drawn to the fact that many people in this situation were not advised properly at the time; and if he will make a statement on the matter. [12754/02]

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

In line with the Government's commitment to ensuring the widest possible coverage for contributory pensions, in recent years more flexibility has been introduced into the qualifying conditions for the old age contributory pension scheme. The reduction in 1997 in the average yearly number of contributions required for pension purposes from 20 to ten was particularly significant in this regard.

Arrangements were also introduced to cater for particular groups who would not otherwise qualify for a pension. These include the special pension introduced in budget 2000 for those with pre-1953 insurance and the self-employed pension introduced in 1999. In both cases, at least five years' contributions are required and the pension is paid at 50% of the full personal, qualified adult and child rate.

People whose incomes are below the thresholds for compulsory social insurance may in some circumstances register to become voluntary contributors. In order to be admitted into the social insurance scheme as a voluntary contributor, a person must have at least 126 weeks PRSI paid under compulsory insurance – 260 from April 2002 – in either employment or self-employment. In addition, the person must apply to become a voluntary contributor within 12 months after the end of the contribution year during which he or she last paid compulsory insurance or during which he or she was last awarded a credited contribution –"credit". Also, the person must agree to pay voluntary contributions from the start of the contribution week after the week in which he or she ceases compulsory insurance.

There is no provision for a person who reaches pension age without sufficient contributions to retrospectively pay voluntary contributions in order to qualify for a pension at that stage.

I consider that it is reasonable to expect people to attain a certain level of contributions over their working career in order to qualify for a contributory-based pension. From an equity perspective, a certain contribution threshold must apply. This not only upholds the social insurance principle, but also affirms the expectations and entitlements of those who have a history of strong attachment to social insurance.

In relation to the issue of information provision, my Department regularly produces up-dated publications that outline the contribution requirements for contributory pensions. It can be quite difficult to identify possible voluntary contributors. My Department is considering several mechanisms of identifying this group at present in order to supply them with the most up-to-date information on the scheme.