John Paul Phelan (Carlow-Kilkenny, Fine Gael) | Oireachtas source

The Minister of State, Deputy Brophy, is taking the matter in the absence of someone from the Department of Social Protection. His background of being self-employed is appropriate to answer this query. This matter stems from a constituent who is almost a neighbour of mine. He retired at the beginning of 2022. This query is also in the context of trying to encourage more people to make provision for private pensions and the auto-enrolment system being introduced by the Department. The matter centres on a specific point. The constituent in question and others who have approved retirement funds, ARFs, and who receive an annual income from those funds of €5,000 or less are not liable for PRSI on it. There is an exemption for self-employed PRSI on income under €5,000.

However, this was not brought to the attention of the individual and is not brought to the attention of others in a similar position. As we move forward, I suspect a great many people may potentially be caught in a similar situation. When my constituent contacted the Department of Social Protection, he was allowed, as we all know, a four-year refund, which is the maximum the Department and Government agencies allow. The problem is that he paid his 4% contribution for more than ten years. As a result, he has suffered the loss of six or seven years of PRSI contributions. When he contacted his insurance provider, he was directed to the Department. The Department quite rightly, understandably and efficiently refunded him four years of payments but he was left at a loss for the rest. There is a clear lack of communication that this anomaly exists, not least a lack of communication with the public who have invested in ARFs.

It is also unjust that people have been making contributions which they were not required to and were not forewarned about. I spoke directly with the Minister, Deputy Humphreys, about the issue earlier today. I realise that I may not have phrased the Topical Issue matter accurately when I submitted it this morning, but it does raise the question that there is a cohort of people who made contributions for which they will receive no benefit. They made PRSI contributions that they were not obliged to make and they will be at a loss because of them.

It is incumbent on the Department of Social Protection, in the first instance, to communicate this issue to the public when they are deciding to contribute to the approved retirement funds, ARFs, and the insurers to make that information clear to people when they are deciding to make provisions for their retirement. This anomaly exists and I suspect quite a few people will be surprised when they reach retirement age and discover that they should not have been paying a contribution for which they will receive no benefit.

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