Dáil Éireann Debate, Tuesday - 17 January 2017
634. Deputy Michael McGrath asked the Minister for Social Protection his Department's policy in relation to the payment to a person of a weekly State pension to which they are entitled in circumstances whereby the person owes a sum to the Revenue Commissioners under the income tax heading and has a payment arrangement in place with the Revenue Commissioners which is being honoured; and if he will make a statement on the matter. [1295/17]
Amharc ar fhreagraTo qualify for a State pension (contributory), a person must satisfy a number of qualifying conditions which include commencing insurable employment at least 10 years before pension age, having a minimum of 520 qualifying PRSI contributions and achieving a yearly average of at least 10 qualifying contributions, paid or credited, over their working life.
Social insurance contributions (Class S PRSI) were introduced for self-employed people on 6th April 1988. This provides cover for self-employed people for long-term benefits such as State pension (contributory) and widows/widowers pension (contributory).
Social welfare legislation stipulates that a self-employed contributor shall not be regarded as satisfying the qualifying conditions for State pension (contributory), unless all outstanding self-employment contributions have been paid by him/her in full. Where contributions are paid subsequent to a claimant’s 66th birthday, State pension (contributory) can only be awarded from the date on which the self-employment liability has been fully discharged. These provisions are consistent with the contributory and solidarity principles which underpin the social insurance system.
In the event that a person has not paid the required PRSI contributions to qualify for a State pension (contributory), they may make a claim to the State pension (non-contributory), subject to their satisfying the qualifying conditions for that payment. The maximum rate of that pension is 95% that of the maximum contributory pension rate, and while it is means-tested, over 70% of recipients receive it at the full rate. If a person only qualifies for this payment at a reduced rate, they will generally have more means, when the payment is taken into account, than a person wholly dependent upon the State pension.
The Deputy should note matters related to the collection of tax are outside the responsibility of my Department, and should be pursued with the Revenue Commissioners. Income tax and outstanding PRSI payable by a self-employed contributor is treated as one aggregate sum in accordance with the provisions of social welfare legislation.
I hope this clarifies the matter for the Deputy.
