Dáil Éireann Debate, Wednesday - 10 November 2004
122 Mr. Gilmore asked the Minister for Social and Family Affairs the amount paid out by his Department since the pre-1953 pension was introduced in 2000; his views on a miscalculation of the costs of the scheme; and if he will make a statement on the matter. [28202/04]
Amharc ar fhreagraIn May 2000, a special half rate old age contributory pension was introduced to enable people with pre-1953 insurance who could not qualify for a payment under normal qualifying conditions to receive a pension. People already qualifying for pensions at less than half rate could also benefit from the new scheme. In order to be eligible for the payment a person needs 260 paid contributions at the appropriate rate, which can comprise a mixture of pre- and post-1953 contributions.
Based on analysis and previous experience of other special measures it was estimated that some 3,000 persons would qualify for this new pension in 2000 at a full year cost of €8.9 million. The overall claim load was not expected to exceed 5,000 people. By the end of 2000, however, over 11,500 applications had been received, of which 3,545 had been awarded pensions. This high level of interest has continued and by the end of October 2004, a total of 28,410 pre-1953 pensions were awarded. Approximately 67% of these pensions are being paid to residents of the UK and other countries. Up to the end of 2004, the total cost, which includes the budget increases in those payments, is estimated at €459 million.
The reason for the underestimation which occurred in this case was, essentially, that the Department, based on its current databases, did not anticipate the large influx of claims from persons resident abroad. Estimates depend on the data available and in the area of social welfare these are administrative data. By definition, these data are compiled for the administration of the various programmes and frequently, for a variety of reasons, are not that suitable for analysis purposes. It can be very difficult to access and interrogate the data and these difficulties are even more pronounced when dealing with pensions, where records can date from as far back 40 or 50 years ago.
My Department is frequently required to estimate the costs of policy measures and its record in this regard is a good one. This has been recognised by the Department of Finance. The experience in this case was highly unusual and, as I have explained, related to lack of data. However, the Department will take on board the specific lessons of this project in estimating the costs of similar proposals in the future.
