Written Answers Nos. 50-63
50. Deputy Éamon Ó Cuív asked the Minister for Employment Affairs and Social Protection the number of vacancies on the rural social, Tús and community employment schemes, respectively; the steps she will take to ensure the places on these schemes are filled; and if she will make a statement on the matter. [26315/18]
Amharc ar fhreagraWork schemes such as Tús and Community Employment (CE) are positive initiatives that enable the long-term unemployed to make a contribution to their communities whilst up-skilling themselves for prospective future employment. The rural social scheme (RSS) provides farmers and fishermen with income support while they also make a contribution to their community. As the Deputy is aware Tús and RSS are delivered and managed at local level through the network of local development companies and Údarás na Gaeltachta , known as Implementing Bodies (IB’s) and each of them have been awarded a specific quota of Tús and RSS participants, based on their ability to source suitable placements. CE schemes are typically sponsored by groups (known as sponsors) wishing to benefit the local community. My Department agree participant numbers annually with each CE sponsor organisation who are responsible for the recruitment of participants and to identify suitable work placements. As on 9th June 2018, there were 380 participant vacancies on the rural social scheme (RSS) out of the 3,350 available participant places.
The CE scheme has a total of 26,542 approved participant places with 4,850 participant vacancies. The current Tús participant quota is 8,260 reducing to 6,500 before year end. As on 9th June 2018, there were approximately 1,849 participant vacancies nationwide.
The Deputy will appreciate that given the welcome improvements in the labour market in recent years with reducing numbers of long term unemployed on the Live Register, which is the target cohort for CE and Tús, it is proving difficult to fill the number of places available nationwide. To broaden access to these initiatives to a wider range of people, I have introduced a number of changes to the qualifying criteria and since 1st June I am facilitating persons to take up a placement on CE or Tús while also attending their JobPath provider.
My Department have engaged with the Irish Local Development Network (ILDN) – the representative body for the Tús IBs to implement the reduction in participant numbers from 8,260 to 6,500 and a revised funding structure. Given the improved economic and labour market context, I believe that it is entirely appropriate that we examine this area of expenditure to ensure that we deliver best value for the Irish taxpayer and ensure best use is being made of funding in this area.
51. Deputy Éamon Ó Cuív asked the Minister for Employment Affairs and Social Protection her plans to change the way in which capital is assessed for all means tested payments and bring it in line with the way in which it is assessed for medical and general practitioner cards; and if she will make a statement on the matter. [26316/18]
Amharc ar fhreagraThe Department operates a range of means-tested social assistance payments. Social welfare legislation provides that the means test takes account of the income and assets of the person (and spouse/partner, if applicable) applying for the relevant scheme. Income and assets include income from employment, self-employment, occupational pensions, maintenance payments as well as property owned (other than the family home) and capital such as savings, shares and other investments. The capital assessment formula for social assistance schemes is outlined in the following table:
|
Amount of capital |
Means assessment |
|
Initial disregard |
Nil |
|
Next €10,000 |
€1 per €1,000 |
|
Next €10,000 |
€2 per €1,000 |
|
Remaining capital |
€4 per €1,000 |
For most social assistance schemes (such as jobseeker’s allowance, farm assist, carer’s allowance, one-parent family payment and the state pension non-contributory), the initial disregard of capital is €20,000. In the case of disability allowance, there is an initial €50,000 disregard, and for supplementary welfare allowance, an initial disregard of €5,000 applies.
In the case of carer’s allowance and the state pension non-contributory, capital is halved when assessing means for a claimant who is one of a couple. There are also general means disregards applicable in these schemes.
In this regard, the capital assessment for the medical card may be more generous than the means assessment for some social assistance schemes, but it is also more onerous than some others. Furthermore, it should be noted that eligibility for an income support is quite distinct from eligibility for a medical card.
Any proposal to change the means assessment for means-tested social assistance schemes would have to be considered in an overall policy and budgetary context.
52. Deputy Willie O'Dea asked the Minister for Employment Affairs and Social Protection her plans to increase the back to school clothing and footwear allowance; and if she will make a statement on the matter. [26407/18]
Amharc ar fhreagraThe back to school clothing and footwear allowance scheme provides a once-off payment to eligible families to assist with the costs of clothing and footwear when children start or return to school each autumn. The Government has provided €49.5 million for the scheme in 2018. The payment rates are €125 for eligible children aged 4 to 11 years and €250 for children aged over 12 years and attending secondary school. Each year Barnardos completes a School Costs Survey and the results from 2017 indicated that on average parents paid approximately €140 to €150 for a primary school pupil’s uniform and shoes and approximately €260 for secondary school pupil’s uniform and shoes. The survey findings show that the current rates of payment meet most of the cost of clothing and footwear for school children, 89% of cost for senior infants and 96% for 1st year pupils.
The household income limits for the scheme are being increased for 2018 to ensure that the increases in social welfare payment rates introduced by Budget 2018 do not negatively impact on people’s entitlement to the allowance.
In addition, in April 2017, my colleague the Minister for Education and Skills, published a circular on the measures to be adopted by schools to reduce the cost of school uniforms and other costs, as part of a range of measures to take greater account of the needs of parents and students in the school system.
Any changes to the rates would have to be considered in a budgetary context and within the scope of the overall resources available for welfare improvements.
I trust this clarifies the position.
53. Deputy Aindrias Moynihan asked the Minister for Employment Affairs and Social Protection her plans to introduce flexibility into the JobPath programme to allow persons to transfer between JobPath and community employment schemes; and if she will make a statement on the matter. [26533/18]
Amharc ar fhreagraI am happy to inform the Deputy that I recently announced that jobseekers who are engaged with the JobPath service can, from 1st June, apply for CE and Tús placements while continuing to engage with JobPath. This will ensure that jobseekers can benefit from the job-seeking support of the JobPath service while also availing of a part-time work placement provided by CE or Tús. This will have a number of benefits both for the vital services provided at a local level by participants on CE and Tús programmes and directly for the Department’s customers. It will, in particular, enable those people with the JobPath service to not only continue to receive the personalised employment counselling and jobsearch support provided by their JobPath personal advisors but also to avail of CE or Tús placement which will provide valuable occupational activity and work experience.
In making this change I was particularly conscious that case managed employment counselling and support is shown internationally, and in Ireland, to be the most effective means of supporting people back into sustained employment. I did not wish for people to cease participation in this type of service in order to take up a place on a part-time State employment programme. The decision I have now made enables people to benefit from both types of support.
I was also conscious in taking this decision that the resource constraints that informed the Department’s policy up to this point have abated somewhat. In the past the Department operated what was a ‘one person-one place’ policy in order to ration the available places among all jobseekers. Given the welcome improvement in the labour market with unemployment now down to under 6% this policy can be relaxed.
The JobPath service will be adapted to cater for those who opt to take up a Tús or Community Scheme and all meetings and activities will be scheduled to take account of the Scheme commitments. For example if a person is committed to participate in the employment scheme for 5 mornings, all JobPath meetings including training and job search activities will be scheduled for the afternoons. The JobPath companies will continue to provide all the supports which it currently provides. CE and Tús providers will not have to make any changes to their operations.
I trust this clarifies matters for the Deputy.
54. Deputy Bríd Smith asked the Minister for Employment Affairs and Social Protection if the rules regarding access to lone parent payments for long-term foster carers of children will be examined to ensure fosterers are not forced to choose between continuing the care of children or receiving a social welfare payment; and if she will make a statement on the matter. [26584/18]
Amharc ar fhreagraUnder the current social welfare legislation in order to qualify for payment of One-Parent Family Payment (OFP), an applicant must be a qualified parent of at least one relevant child who is ordinarily resident in the State, is not detained in a children detention school, and has not attained the relevant age (currently 7 years of age). A qualified parent is defined as:
(a) a widow,
(b) a widower,
(c) a separated spouse,
(d) an unmarried person,
(e) a person whose spouse or civil partner has been committed in custody to a prison or place of detention for not less than 6 months,
(f) a surviving civil partner,
(g) a civil partner who is not living with the other civil partner of the civil partnership, or
(h) a person who is not a party to a civil partnership who is the parent, step-parent, adoptive parent, or legal guardian of at least one relevant child, who normally resides with that person.
To be a qualified parent the applicant must therefore be legally defined as either the parent or guardian of the relevant child. A foster carer is not the legal parent or guardian of the foster child and as such is not a qualified parent in this context.
The provision of fostering services is a matter for Tusla (the Child and Family Agency). This includes any supports, including financial, that are required by either the foster carers or the foster child. A specific weekly payment is payable to foster carers by Tusla.
Where a child has been placed in foster care by Tusla and the child has been in the continuous care of the foster carer(s) for 6 months, Child Benefit may then transfer to the foster carer(s).
55. Deputy Willie Penrose asked the Minister for Employment Affairs and Social Protection the status of the work under way in her Department to prepare for a hard Brexit. [26566/18]
Amharc ar fhreagraCo-ordination of the whole-of-Government response to Brexit is being taken forward through the cross-Departmental coordination structures chaired by the Department of Foreign Affairs and Trade. Contingency planning for a no-deal or worst-case outcome, bringing together the detailed work being undertaken by individual Ministers and their Departments on issues within their policy remit, is now well advanced. Its focus is on the immediate regulatory and operational challenges which would result from such an outcome. It assumes a trading relationship based on the default WTO rules, but also examines the possible effects on many other areas of concern. This work is therefore providing baseline scenarios for the impact of Brexit across all sectors, which can then be adapted as appropriate in light of developments in the EU-UK negotiations, including in regard to transition arrangements and the future relationship. It also takes account of the planning being undertaken at EU level by the new Commission Preparedness Unit, which is issuing information notes aimed at different business sectors. My key area of concern is the impact of Brexit on the current reciprocal arrangements for social insurance schemes, social assistance schemes and child benefit between Ireland and the UK, including Northern Ireland. The importance of maintaining the Common Travel Area was acknowledged in Prime Minister May’s letter of 29 March 2017 triggering Article 50 of the TEU, the Joint EU/UK Progress report agreed at the European Council on 15th December 2017 and in the protocol to the draft Withdrawal Agreement published by the Commission on 28th February 2018.
I met with the UK Secretary of State for Work and Pensions, the Right Honourable Esther McVey, on Monday 23rd April 2018. I emphasised my objective of ensuring that the reciprocity of civic rights and social welfare rights and entitlements, which currently exist for Irish and UK citizens moving within Ireland and between Ireland and Britain under the Common Travel Area, are safeguarded and maintained. I am happy that we have a broad agreement to preserve the status quo in that regard.
I have a dedicated team in my Department which is conducting a deep analysis of scenarios on a scheme by scheme basis and contingency planning is ongoing for all outcomes, including a no-deal or worst-case outcome.
56. Deputy Joan Collins asked the Minister for Employment Affairs and Social Protection when she will bring forward the Social Welfare, Pensions and Civil Registration Bill 2017, which was due to be considered by the Oireachtas Joint Committee on Employment Affairs and Social Protection on 31 May 2018. [26530/18]
Amharc ar fhreagraSecond Stage of the Social Welfare, Pensions and Civil Registration Bill 2017 concluded on 4th October 2017. Government approval to draft provisions for a number of additional items to be included in the Bill at Committee Stage was obtained subsequently. These provisions are currently being finalised by the Office of the Parliamentary Counsel. They include amongst others, provisions related to Defined Benefit Pensions and measures related to GDPR.In respect of the Defined Benefit provisions, the purpose of this Bill is to respond to the ongoing difficulties in DB schemes and to increase protections for members as well as encouraging employers to ensure that schemes are well funded and managed. These provisions are quite technical and complex, however, work to finalise them is at an advanced stage.
The Bill was provisionally scheduled for Committee Stage on the 31st May. This date was postponed for a short period to allow for the finalisation of the necessary Government amendments. When these amendments have been finalised an early date will be requested from the Committee.
57. Deputy Clare Daly asked the Minister for Employment Affairs and Social Protection the personal information of JobPath participants that is shared between her Department and a company (details supplied); and if information is shared with a third party such as an employer or prospective employer or other third parties if a participant has signed a personal progression plan. [26511/18]
Amharc ar fhreagraAs the Deputy will be aware JobPath is an employment activation service that supports people who are long-term unemployed and those most distant from the labour market to secure and sustain full-time paid employment. Upon referral the JobPath provider receives data that allows them to commence engagement with the customer. This data includes the customer’s name, address, date of birth, PPSN, education and employment history and work skills (e.g. possession of a driving licence) and employment preferences. During the period of the customer’s engagement with the JobPath service the contractors will notify my Department of any change of circumstance (e.g. address) which the customer notifies to the contractor and should the customer not be successful in gaining employment the contractor will provide my Department with an exit update upon completion of the 52 week engagement.
JobPath providers are registered with the Office of the Data Protection Commissioner as data processors and are legally bound to observe and adhere to Data Protection requirements.
All contracts in place are governed by and construed in accordance with the laws of Ireland and the courts of Ireland have exclusive jurisdiction over these contracts. My Department’s contracts with the JobPath providers are in compliance with all relevant legislation and any information shared is contractually based and necessary to provide a service.
The JobPath Providers are required to offer in-work support to the customer for up to twelve months while they remain in employment. This includes scheduled contact with the person as well as ad-hoc contact should they need immediate support or advice, this may be particularly important for those in temporary or part-time employment to provide the specific support needed to progress to more sustainable permanent employment.
Personal Data is not shared by the Job Path providers with employers or shared with other third parties. Sub-contractors engaged by the Job Path service providers for the purpose of delivering the Job Path service are also fully governed by the same contractual obligation as the main contractor.
The JobPath providers may contact employers as part of the in work support provided to Job Path customers who attain sustainable employment while with the Job Path service. In addition, contractors may, with the jobseekers consent, provide non personal information to prospective employers or assist jobseekers in completing job application forms.
A JobPath service customer is not under an obligation to provide employment or employer details to the JobPath provider but, if they wish to do so and avail of the in-employment support offered, all information will be treated confidentially.
I trust this clarifies the matter for the Deputy.
58. Deputy Paul Murphy asked the Minister for Employment Affairs and Social Protection if legislation to prevent employers from unilaterally downgrading their employees' pension schemes from defined benefit to defined contribution is planned; and if she will make a statement on the matter. [26608/18]
Amharc ar fhreagra74. Deputy Mick Barry asked the Minister for Employment Affairs and Social Protection if she will introduce legislation to ensure private companies cannot unilaterally downgrade their employees' pension schemes from defined benefit to defined contribution or close defined contribution schemes; and if she will make a statement on the matter. [26579/18]
Amharc ar fhreagraI propose to take Questions Nos. 58 and 74 together.
Almost all Irish defined benefit schemes have a rule that allows the employer to cease contributions, usually after a notice period. Currently there is no legislative obligation on the employer to make contributions and no further liability on the employer where contributions cease. Neither is there an obligation on the employer to give notice to members or to consult in advance of ceasing contributions.
In the case of defined benefit schemes, neither I nor the Pensions Authority has the power under legislation to intervene to compel an employer to continue to make contributions to a scheme. Even where a scheme is closed to new members or to future accrual of benefits, the sponsoring employer role continues in relation to that scheme.
The Roadmap for Pensions Reform, which was published in February of this year, details specific measures that will modernise our pension system. It sets out under Strand 4, ‘Measures to Support the Operation of Defined Benefit Schemes’, that the Government is committed to advancing the Social Welfare, Pensions and Civil Registration Bill 2017. The purpose of this Bill is to respond to the ongoing difficulties in DB schemes and to increase protections for members as well as encouraging employers to ensure that schemes are well funded and managed.
The General Scheme of the Bill, which was published in May 2017, contained a number of key measures relating to DB pension schemes. These proposed provisions will ensure that an employer cannot “walk away” at short notice from the pension scheme it is supporting by providing a 12 month notification period where an employer is seeking to cease making contributions to a scheme. The amendments seek a middle road between the current position where employers can abandon DB schemes and full and immediate debt on employer provisions. The measures will act to support existing provisions in the Pensions Act and will provide for further protection for scheme members’ benefits and enhance employer responsibilities for their schemes.
The amendments also provide for more frequent monitoring of the financial position of schemes and will further provide that, where a scheme is in deficit and a funding proposal has not been put in place in a timely manner, the Pensions Authority may direct steps to be taken to ensure that the scheme meets the funding standard.
It is important to note that if this new legislation is enacted, a sponsoring employer will have to give a minimum notice period of twelve months before contributions to a scheme can cease. However, it will not prevent a company from ceasing contributions once the minimum notice period is served provided the scheme meets the Minimum Funding Standard.
These provisions are quite technical and complex. Work to finalise them is at an advanced stage and I hope to be in position to bring forward the amendments at Committee Stage in the near future.
I hope this clarifies the matter for the Deputies.
59. Deputy Willie Penrose asked the Minister for Employment Affairs and Social Protection her plans for reforms to child benefit; her further plans to introduce means testing; her plans to increase it in budget 2019; and if she will make a statement on the matter. [26562/18]
Amharc ar fhreagraChild Benefit is a monthly payment made to families with children in respect of all qualified children up to the age of 16 years. It is designed as a universal payment, in recognition of the costs involved in raising children, and plays an important role in tackling child poverty. As a universal payment it does not rely on a means test or social insurance contributions. The payment continues to be paid in respect of children up to their 18th birthday who are in full-time education, or who have a disability. Child Benefit is currently paid to almost 629,000 families in respect of nearly 1.2 million children, with an estimated expenditure of over €2 billion in 2018. I do not intend introducing a means-test for Child Benefit. Means testing Child Benefit is not being considered by Government, and is not provided for in the Programme for Government. As Minister for Employment Affairs and Social Protection, I support the universality of the Child Benefit payment, and the principle that all families with children should receive this income support. Given the universality of Child Benefit it is not a payment which lends itself to a targeted approach and the considerable costs associated with any upward adjustment to the payment can result in benefits being spread very thinly, rather than making a difference where there is most need. Any such proposal would have to be considered in an overall budgetary context.
Government policy is to provide additional supports for parents and their children through increased services, rather than increased cash transfers. This includes such services as free early years education through the Early Childhood Care and Education (ECCE) Programme, and enhanced provision of affordable childcare.
60. Deputy Michael McGrath asked the Minister for Employment Affairs and Social Protection if she will review the requirement that the parents of some persons in receipt of disability allowance have to keep a full record of expenditure and retain all receipts for possible inspection; and if she will make a statement on the matter. [26180/18]
Amharc ar fhreagraUnder social welfare legislation where a person is medically certified as being unable to manage their own financial affairs, I as Minister may appoint an agent who is responsible for collecting the person’s social welfare payment and acting on their behalf. An application form must be completed on behalf of the person concerned and documentary evidence provided of incapacity. The agent appointed may or may not be a relative of the person concerned.The appointed agent is responsible for ensuring all payments received are used to the benefit of the person and in their best interest. They are also required, under legislation, to keep a record of all transactions involving the monies received and produce these records when requested to do so by an officer of the Minister. All receipts should be retained for the duration of the agency arrangement. Amongst their duties is the responsibility to deal with financial matters on behalf of the person concerned with the balance lodged to an account for the benefit of the person. They are also required to notify my department of any changes in the person’s circumstances.
The legislation governing the responsibilities of agents in such cases is contained in Article 202A of the Social Welfare (Consolidated Claims, Payments and Control) Regulations, 2007 (S.I. No. 142 of 2007).
There is an increasing awareness and evidence of abuse of vulnerable adults and research has shown that one of the areas of significant abuse can be financial abuse. I believe, however, that the majority of persons acting as agents collecting social welfare payments for customers unable to do so themselves, do so out of a genuine caring disposition and act in good faith.
A working group has been established in my department to examine and make recommendations on the adequacy of the current procedures and processes for agents with a view to make recommendations that comply with the Assisted Decision-Making (Capacity) Act 2015 and the Codes of Practice being developed by the National Disability Authority under the Act.
61. Deputy Peter Burke asked the Minister for Employment Affairs and Social Protection her plans to reintroduce the redundancy rebate payable to employers; and if she will make a statement on the matter. [26436/18]
Amharc ar fhreagraThe purpose of the redundancy payments scheme is to compensate employees for the loss of their jobs, where the employer is unable to pay statutory redundancy due to financial difficulties or insolvency. The scheme is funded from the social insurance fund.Up to 2011, the scheme provided a rebate of 60 per cent to employers who provided statutory redundancy payments to their employees. In Budgets 2012 and 2013, the Government first reduced and then abolished the rebate payment. This decision was made because of the high cost of the rebate and its impact on the financial sustainability of the social insurance fund at the time of the economic crisis. Furthermore, the rebate to employers was paid regardless of a company’s financial situation and ability to pay, thus benefiting viable and profitable companies, including multinational companies. It was not a targeted use of the resources of the social insurance fund.
The redundancy payments scheme, as it now operates, benefits employees whose employers are unable to pay for statutory redundancy. Employers who declare they cannot sustain the cost of redundancy payments, albeit they continue to trade, are required to submit documentation from their accountants or solicitors and to accept liability for the redundancy payment to the social insurance fund. This ensures that the current scheme takes into account both an employer’s ability to pay redundancy payments and that the social insurance fund can be reimbursed in the future, through debt repayment if their financial position improves.
There are currently no plans to reinstate the rebate scheme. I hope this clarifies the matter for the Deputy.
62. Deputy John Curran asked the Minister for Employment Affairs and Social Protection if the operation of the partial capacity benefit scheme will be reviewed to allow a person engage in part-time or casual work as a pathway back to employment but to receive a full social welfare payment for weeks they do not secure paid employment; and if she will make a statement on the matter. [26535/18]
Amharc ar fhreagraPartial capacity benefit (PCB) was introduced in February 2012 and is designed for people who are in receipt of long term social insurance invalidity / illness / disability income support payments who have some capacity for work. Applicants must be in receipt of either invalidity pension (IP) or illness benefit (IB) Illness benefit recipients must be in payment for at least six months at the date of application for PCB (the six months does not apply to IP). If awarded, PCB will allow them to continue to receive a percentage of their IB or IP payment while working. Participation on the PCB scheme is voluntary. A person who participates on the PCB scheme may return to his / her IB or IP payment if, for example, his / her employment ceases or if the person finds that he / she cannot continue to work.
A Medical Assessor will assess the restriction on the applicant’s capacity for work. This may require him / her to attend a medical assessment. Applicants will qualify for PCB if the restriction on their capacity for work is assessed as moderate, severe, or profound. If it is assessed as mild they will not qualify and their continued eligibility to Invalidity Pension will be reviewed.
The rate of payment will depend on the personal rate of the qualifying scheme (Illness Benefit or Invalidity Pension) from which the customer originates and the medical assessment of the customer’s capacity for work.
|
Table 1: Rates of Partial Capacity Benefit |
|||
|
Medical Assessment |
% of Illness Benefit or Invalidity Pension personal rate |
Person previously getting Illness Benefit at the maximum personal rate €198.00 |
Person aged under 66 and previously getting Invalidity Pension at the maximum personal rate €203.50 |
|
Moderate |
50% |
€99.00 |
€101.75 |
|
Severe |
75% |
€148.50 |
€152.63 |
|
Profound |
100% |
€198.00 |
€203.50 |
As I noted earlier PCB recipients may return to their original payment if the job does not work out. I should also point out that PCB recipients who have a temporary absence from work or episodic condition and need to take time off are, on notifying the Department, uplifted to the full-rate of payment appropriate to the originating scheme.
An internal DEASP review of Partial Capacity Benefit made a number of recommendations in relation to the scheme including recommendations in respect of developing PCB as an in-work support and was published as part of the broader Make Work Pay process (http://www.welfare.ie/en/downloads/A%20Review%20of%20Partial%20Capacity%20Benefit.pdf). The review identifies some of the policy, operational, external engagement and IT issues that would need to be addressed to do this.
The recommendations in the report will be given additional consideration and analysed further following the completion of the report currently being prepared following the national consultation process on Make Work Pay recommendations relating to early engagement with people with disabilities.
63. Deputy Willie O'Dea asked the Minister for Employment Affairs and Social Protection her plans to address issues in relation to defined benefit pensions; if her plans will deal with the situation currently being experienced by workers in a company (details supplied); and if she will make a statement on the matter. [26404/18]
Amharc ar fhreagra72. Deputy John Brassil asked the Minister for Employment Affairs and Social Protection the steps she is taking to protect the defined benefit pension scheme of persons in an organisation (details supplied); and if she will make a statement on the matter. [21237/18]
Amharc ar fhreagra77. Deputy Willie Penrose asked the Minister for Employment Affairs and Social Protection the status of her plans to protect defined benefit pension schemes; and if she will make a statement on the matter. [26564/18]
Amharc ar fhreagraI propose to take Questions Nos. 63, 72 and 77 together.
While it is not appropriate for me to comment on an individual pension scheme, I am aware of recent announcements regarding the Irish Life pension scheme and plans to close the scheme to future accrual. I understand that the scheme is very much financially secure and its assets adequately cover all liabilities that will arise in the event the Trustees take a decision to wind-up the scheme.
Neither I nor the Pensions Authority has the power under legislation to intervene to compel an employer to continue to make contributions to a scheme. Where a scheme is closed to new members or closed to future accrual of benefits, the scheme remains subject, under EU and Irish law, to the funding standard requirements and to the Pensions Act generally and it must continue to satisfy the minimum funding standard into the future. The sponsoring employer role also continues in relation to that scheme.
Almost all Irish defined benefit (DB) schemes have a rule that allows the employer to cease contributions, usually after a notice period. Currently there is no legislative obligation on the employer to make contributions and no further liability on the employer where contributions cease. Neither is there an obligation on the employer to give notice to members or to consult in advance of ceasing contributions.
However, in the case where a restructuring of benefits is proposed, the employer and the trustees of a pension scheme are required to notify scheme members, beneficiaries and the authorised trade unions. Furthermore, changes made to the Occupational Pension Schemes (Section 50 and 50B) Regulations in 2015 require trustees to also notify groups representing the interests of pensioners and deferred scheme members in a scheme in such a situation.
The Roadmap for Pensions Reform, which was published recently, details specific measures that will modernise our pension system. It sets out under Strand 4, ‘Measures to Support the Operation of Defined Benefit Schemes’, that the Government is committed to advancing the Social Welfare, Pensions and Civil Registration Bill 2017.
The purpose of this Bill is to respond to the ongoing difficulties in DB schemes and to increase protections for members as well as encouraging employers to ensure that schemes are well funded and managed.
The general scheme of the Bill, which was published in May 2017, contained a number of key measures relating to DB pension schemes. These proposed provisions will ensure that an employer cannot “walk away” at short notice from the pension scheme it is supporting by providing a 12 month notification period where an employer is seeking to cease making contributions to a scheme. The amendments seek a middle road between the current position where employers can abandon DB schemes and full and immediate debt on employer provisions. The measures will act to support existing provisions in the Pensions Act and will provide for further protection for scheme members’ benefits and enhance employer responsibilities for their schemes.
The amendments also provide for more frequent monitoring of the financial position of schemes and will further provide that, where a scheme is in deficit and a funding proposal has not been put in place in a timely manner, the Pensions Authority may direct steps to be taken to ensure that the scheme meets the funding standard.
It is important to note that if this new legislation is enacted, a scheme will have to give a minimum notice period of twelve months before contributions can be stopped. However, it will not prevent a company from ceasing contributions once the minimum notice period is served provided the scheme meets the Minimum Funding Standard.
These provisions are quite technical and complex. Work to finalise them is at an advanced stage and I hope to be in position to bring forward the amendments at Committee Stage at the earliest possible opportunity.
I hope this clarifies the matter for the Deputies.
