Dáil Éireann Debate, Tuesday - 22 November 2022
249. Deputy Alan Farrell asked the Minister for Public Expenditure and Reform if he will detail the considerations given by her Department with regard to individuals who have retired on a supplementary pension, prior to proposed changes; and if he will make a statement on the matter. [57638/22]
Amharc ar fhreagraAs the Deputy may be aware, I have overall policy responsibility in relation to public service occupational pension schemes payable to retired public servants.
Since 6 April 1995, all newly-appointed public servants became fully insured under the Social Insurance System. They pay Class A PRSI which would entitle them to Social Insurance Benefits such as, maternity benefit, illness benefit, State Pension Contributory (SPC) and other social insurance entitlements not available to many other public servants paying modified PRSI (Class B, C or D). However, it is worth noting that prior to 6 April 1995 as many as 39,000 public servants were always fully insured. A significant number of occupational pension schemes (both private and public sector) take account of a member’s entitlement to the SPC when calculating occupational pension benefits. This is known as ‘integration’, and is also sometimes referred to as 'coordination'.
A public servant paying Class A PRSI will receive both an occupational pension and it is assumed they will be also be entitled to the maximum rate of the SPC. As the SPC element is paid for by way of PRSI contributions, this part of the pension is bound by the rules and criteria as set by Department of Social Protection (DSP). However, in the case of public servants, an occupational supplementary pension may be payable in circumstances where the total pension package (i.e. the combined total of the public service occupational pension plus any social insurance benefits) is less than that of the pension payable to a public servant on an equivalent salary and whose pension is not integrated with the Social Insurance system and who do not have an entitlement to the SPC. In this regard, it should be noted that the occupational supplementary pension does not seek to make up the value of a full SPC but rather it seeks to make up the difference between the integrated occupational pension, combined with the Social Insurance Benefit in payment, and the occupational pension payable to an individual whose pension is not integrated with the SPC.
The payment of an occupational supplementary pension is subject to an individual meeting certain criteria, such as the retired public servant shall not be in paid employment and:
(i) fails to qualify for Social Insurance Benefit or
(ii) qualifies for Social Insurance Benefit at a reduced rate and
(iii) has reached minimum pension age or is in receipt of an ill-health pension
The following Social Insurance payments are considered when assessing an individual for an Occupational Supplementary Pension: The State Pension Contributory (SPC), the State Pension Transition (also known as a Retirement Pension and now abolished since January 2014), Illness Benefit, Invalidity Benefit, Benefit Payment for 65 Year Olds and Jobseeker’s Benefit.
Other benefits/allowances not listed above are not taken into account when assessing an individual’s entitlement to an Occupational Supplementary Pension e.g. Widow's, Widower's or Surviving Civil Partner's (Contributory) Pension, Jobseeker’s Allowance and any other means-tested benefit/allowance.
Based on further clarification received by my officials, your question relates to the method used to calculate eligibility for the SPC and the transition from the Yearly Average model to the Total Contributions Approach. The criteria for qualifying for the SPC is a matter for DSP in the first instance and should be raised with the Minister for Social Protection.
However, as advised above, if a retired public civil with an occupational pension integrated with the Social Insurance system fails to qualify for the full rate of the SPC, through no fault of their own, they may qualify for the payment of an occupational supplementary pension to ensure their overall pension entitlements are the same as an occupational pension of a public servant whose pension is non-integrated.
