John Curran (Dublin Mid West, Fianna Fail) | Oireachtas source

I thank the Senator. I will make a few points before I call on Mr. Duggan to respond. There has been much discussion on annual averaging versus the total contribution. Mr. Duggan was very direct in his opening statement where he indicated that the additional bands that were put in were specifically to make a saving. The irony is that the savings were imposed on a particular group of people rather than being spread across the board. Given that this cohort of people have felt it more, it has really highlighted the issue. It was very prevalent in the debate on Committee Stage of the Social Welfare Bill that women who had left work for a period might have total contributions greater than others, but their total pension payment was reduced. Two things would be very useful from the committee's point of view. We talk about a total contribution model but as an academic exercise it would be useful for the committee to see what that might look like. If one took the current budget figure and divided it into a total contribution model, what would it look like? What would the entry level be in terms of minimum number of requirements? What total maximum would be needed to get the top rate? Such a scoping exercise would be useful for the committee.

Is it the case that at the moment to get the maximum one has to have an average of 48 to 52 contributions, but if one were to get the maximum on a total contribution basis, it would be 1,000 contributions or 1,500? That type of scoping exercise would help the committee to examine what a new model might look like. If there was anything detailed and specific in that regard it would help us considerably. Talk of total contributions can mean a lot of different things to people. Before we go down a certain road, it would be important to know what is involved. The Minister clearly said there would be winners and losers and it would be well worth having a look at what that might mean before we embark on it. That is one specific issue.

Second, from the point of view of effecting change, any kind of change in terms of pensions and eligibility involves a lead-in time. If the contributory pension age is to be set at 67, one does not say it this year for next year in order to afford people an opportunity to get their affairs in order. If the Department is to move from an annual average approach to a total contribution basis, over what period would it take place? Would it be done on a phased basis? Would the two systems be run in parallel or would it be for new entrants? How does the Department see the transition taking place? They are points that were raised already so I do not wish to repeat them.

If the Department has information on the following issue, perhaps it might circulate it to the committee afterwards. It was said that only 35% of those in private employment have pensions. How does that compare to other countries? How are pensions in other countries incentivised to encourage people? What are the various factors that encourage people to have a higher rate of private pensions than 35%?

There was much debate about class S, the self-employed. It was said that they are only paying 4% but 4% of what? It is a lower percentage but what is the figure? Some self-employed people might be earning a high amount.

While it does qualify a person for a contributory pension, the rate is 4%, but one is buying a smaller product. An ordinary pay-as-you-earn, PAYE, or pay-related social insurance, PRSI, contributor would traditionally have greater benefits than somebody in class S. How are they valued? What percentage is attributed to pension and other benefits? What is the basis for the figure of 4% in the case of those in class S?