Niamh Smyth
Ceist:146. Deputy Niamh Smyth asked the Minister for Social Protection if an issue in relation to voluntary contributions (details supplied) will be examined; and if she will make a statement on the matter. [42218/20]
Amharc ar fhreagraWednesday, 9 December 2020
Ceisteanna (146)
Freagraí scríofa
The voluntary contributions scheme is intended to facilitate former employees or former self-employed persons who are no longer subject to compulsory social insurance, to pay contributions directly to my Department on a voluntary basis, in order to protect their State pension (contributory), widows, widower’s or surviving civil partner's (contributory) pension and guardian’s payment (contributory) entitlements. The voluntary contributions scheme is not intended to cover short-term benefits such as illness or jobseeker's benefits nor are voluntary contributions reckonable for eligibility for invalidity pension.
To reflect the limited coverage afforded by the voluntary contributions scheme, the associated contribution charges are significantly lower than those applicable to compulsory social insurance which provides cover for short-term benefits such as jobseeker's benefit. For example, a combined employee/employer contribution of up to 15.05% of an employee's reckonable earnings is paid in respect of an employee which covers the employee for the full range of social insurance benefits. In contrast, the voluntary contribution charge is 6.6% of the preceding year's income of a former compulsory insured employee, subject to a minimum annual charge of €500.
The significant charge variance reflects the difference in the social insurance benefits covered by compulsory social insurance and voluntary social insurance. Any extension in the benefits covered by the voluntary contributions scheme would be a substantial change to the nature and scope of the scheme and would have to be considered in the context of overall budgetary negotiations. Any such development would also necessitate consideration of a commensurate increase in the contribution charge.
I trust this clarifies the matter for the Deputy.