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Pension Provisions.

Dáil Éireann Debate, Wednesday - 29 September 2004

Wednesday, 29 September 2004

Ceisteanna (1144, 1145, 1146)

Finian McGrath

Ceist:

1321 Mr. F. McGrath asked the Minister for Social and Family Affairs the reason only 50.7% of the adult workforce have pension cover, only 44% of women in the workforce have pension coverage, only 12.5% of persons working in the catering and tourism industries have pension coverage, only 15% of seasonal and part-time workers have pension coverage and only 15.8% of persons working in the agriculture industries have pension coverage; and the plans which are being put in place to tackle this crisis. [21904/04]

Amharc ar fhreagra

Freagraí scríofa

The figures in question refer to those in employment who have private or occupational pensions coverage and relate to the first quarter of 2002. A limited update of these figures for the first quarter of 2004, recently released by the CSO, show coverage at 52.4%.

People may not have private or occupational pensions coverage for a number of reasons. Their employer may not provide a pensions scheme, they may be eligible to join a scheme but have opted not to do so or they may not be willing to avail of the various options which are available to take out a private pension.

Improvements in social insurance coverage implemented since 1979 mean that almost all those in employment are now, subject to satisfying the qualifying conditions, eligible for an old age contributory pension at age 66. However, the Government is committed to increasing the numbers who are supplementing the social welfare pension with an occupational or private pension. The national pensions policy initiative, published in 1998, suggested that up to 70% of workers over 30 years of age need such coverage to maintain their pre-retirement standard of living. The most recent figures released by the CSO show 59.1% of workers in this group with supplementary pensions coverage.

The Government introduced personal retirement savings accounts, PRSAs, in 2003 and these are low cost portable pension products aimed at those without access to occupational pensions. Indeed, employers who do not provide such access are required to facilitate employees who wish to avail of a PRSA by entering into an arrangement with a PRSA provider and deducting and remitting contributions. At the same time, a Government awareness campaign is being run by the Pensions Board on my behalf to encourage people to consider their financial needs in retirement and to make the appropriate arrangements. So far, a total of €1 million has been provided to support this campaign.

The current strategy will be reviewed, in accordance with legislation, in 2006. At that stage, progress towards Government targets will be considered and further action decided on, as appropriate.

Questions Nos. 1322 and 1323 answered with Question No. 1320.

Michael Ring

Ceist:

1324 Mr. Ring asked the Minister for Social and Family Affairs if a farmer’s spouse aged 61 can now commence paying contributions to enable them to qualify for an old age contributory pension on reaching 66, in view of that fact that this person is the joint owner of the farm but did not make contributions as a joint owner until now. [22045/04]

Amharc ar fhreagra

In general, all employees, whether full time or part time and self-employed workers with an income of €3,174 or more a year, from all sources who are aged 16 or over, are liable to pay social insurance, PRSI, contributions. Exceptions to this general rule apply in the case of certain family employments which are not covered for social insurance — for example, employment as an employee by one's spouse who is a self-employed sole trader or businessperson. However, if the business does not operate on a sole trader basis — for example, if it is a limited company or a partnership — it is not family employment.

Accordingly, two or more family members who operate a business as a partnership and share the profits may be insurable as self-employed contributors at PRSI class S, provided each has a reckonable income of at least €3,174 per year from all sources.

The partnership must be genuine and be supported by appropriate documentary evidence. Joint ownership of a property does not in itself constitute a partnership agreement. Applications for the backdating of partnership status are not accepted.

According to the information given the person concerned will reach age 66 in 2009. In order to qualify for a standard rate old age contributory pension, OACP, at age 66 a person must have: entered into insurable employment before age 56; at least 260 full-rate employment-self-employment contributions paid; a yearly average of at least ten full-rate contributions paid and-or credited from 1953, or from date of entry into insurance, if later, to the end of the last full contribution year before reaching age 66.

Michael Ring

Ceist:

1325 Mr. Ring asked the Minister for Social and Family Affairs if a person aged 53 can now commence paying contributions to entitle them to an old age contributory pension on reaching their 66th birthday, in view of the fact that their spouse is a farmer who pays full self-employment contributions. [22046/04]

Amharc ar fhreagra

In general, all employees, whether full time or part time and self-employed workers with an income of €3,174 or more a year, from all sources who are aged 16 or over, are liable to pay social insurance, PRSI, contributions. Exceptions to this general rule apply in the case of certain family employments which are not covered for social insurance — for example, employment as an employee by one's spouse who is a self-employed sole trader or businessperson. However, if the business does not operate on a sole trader basis — for example, if it is a limited company or a partnership — it is not family employment.

Accordingly, two or more family members who operate a business as a partnership and share the profits may be insurable as self-employed contributors at PRSI class S, provided each has a reckonable income of at least €3,174 per year from all sources.

The partnership must be supported by appropriate documentary evidence to show that a real partnership exists. Applications for the backdating of partnership status are not accepted.

According to the details supplied, the person concerned will reach age 66 in 2017. To qualify for a standard rate old age contributory pension, OACP, such a person must have: entered into insurable employment before age 56; a total of 520 full rate employment-self-employment contributions paid; a yearly average of at least ten full rate contributions paid and-or credited from 1953, or from date of entry into insurance, if later, to the end of the last full contribution year before reaching age 66.

Question No. 1326 answered with QuestionNo. 1318.
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