The State pension (transition) was introduced in 1970 when it was known as the retirement pension. It was designed to bridge the gap between the standard social welfare pension age, which at that time was 70 years of age, and retirement age of 65. Over time, the social welfare pension age was reduced over a period of years until it reached 66 years of age, which means that State pension (transition) is now only payable for one year. This will change in 2014 when State pension age will be standardised to age 66 for all.
There is currently no entitlement to the transition pension for the self — employed and I have no plans to change the qualifying conditions for State pension (transition) in the forthcoming Bill. Class S contributions which are paid by the self-employed, will continue to provide cover for long-term benefits such as State pension (contributory) and widow's, widower's or surviving civil partner's pension (contributory) only.
In terms of value for contributions paid, the 2005 Actuarial Review of the Social Insurance Fund found that the Fund favours the self-employed over the employed when both employer and employee contributions are included in respect of the employed person. The analysis demonstrates that, despite the fact that they are eligible for a narrower range of benefits, self-employed persons can still gain substantially more from the Fund than employees