Seanad debates

Wednesday, 5 March 2008

Social Welfare and Pensions Bill 2008: Second Stage

 

1:00 pm

Photo of Joe O'TooleJoe O'Toole (Independent)

I wish to raise an issue that I tried to raise in the past year, previous to the Minister becoming the incumbent of his high office. The Minister is a practical man and I do not believe he will disagree with me on this subject, though his answer may be another matter. I am referring to the issue of a spouse employed by a spouse, which will often happen in accountants' offices, veterinary surgeries, dental practices and so on. This issue relates to people who are genuinely working, not those playing the old soldier, and I support any investigations into this that are deemed necessary. I refer to those who work a full day, take holidays when they are entitled to them and make pay-related social insurance, PRSI, contributions.

It appears that in this situation a person pays, has deductions made and makes contributions under class A stamps. The person continues to make these contributions and they are accepted by either the Department of Social and Family Affairs or the Department of Finance. The Minister can correct me if I am wrong because this may have changed in the past month. When these people make early claims for maternity benefit and later claims relating to a contributory old-age pension they are told they are not entitled to do so because stamps accumulated while employed by a spouse are not taken into consideration.

I can see from the Minister's reaction that he has not dealt with this matter before. I know him long enough and well enough to understand that if he makes a commitment to deal with this he will do so. This issue relates to inequality and it is anti-family because it suggests that the smart thing to do before claiming one's pension is to divorce one's partner and then claim the pension. One could then remarry in the future. Perhaps some of this should be dealt with under civil partnership.

I raised this subject as an Adjournment matter with the Minister's predecessor a year ago this week. I was given the impression — I am sure the Minister's advisers will confirm this — that a review was being carried out to identify issues arising from this matter. This topic was raised previously by farming organisations because farmers' wives dealing with book keeping is a growth industry. People working from home may present a different issue but I agree with the thrust of their argument also. I am referring to husbands and wives who work full-time in their spouse's accountancy office, dental surgery or doctor's surgery, receive a salary, keep books properly, make proper deductions and claim a contributory pension. This situation is bad enough but if they were to claim a non-contributory pension the spouse's ordinary income would come into consideration and they probably would not qualify for it.

This issue discourages pension scheme take-up. In The Irish Times yesterday, Fintan O'Toole wrote an article on how few women are covered by pension contributions and the issue I have raised relates to this. I will not be present for the Minister's reply but I will pay attention to it so I ask him not to let me down by referring to people who may be claiming incorrectly. I am not speaking for those people; I am only referring to cases where the Department is satisfied that a person has done or is doing the job he or she claims to have done. There are issues of equality and fairness in this matter. This is also a family issue because we are trying to encourage people to work from home so this matter should be carefully examined.

In terms of where this issue should go, I studied the law relating to this area and the constitutional position on equality. My colleague, Senator Mullen, could interpret the law better than I, a lay person, in this situation. I referred to The Irish Constitution by J. M. Kelly, a legal bible for the layman, which legal practitioners use as an early textbook but the rest of us still refer to in its various editions after 20 years. Professor Kelly, Mr. Gerard Hogan and others would share the view that this looks like invidious discrimination. While there are a variety of entitlements, one could even accumulate the entitlements of both parties in this situation. I am referring to last year's figures, prior to the Minister's huge salary increase.

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