James Breen (Clare, Independent)
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Question 343: To ask the Minister for Social and Family Affairs if he will remove the anomaly whereby a person making voluntary contributions for pension purposes, and who enters insurable employment for a short period, will be penalised by as much as 50% of their pension entitlement when they reach pension age; and if he will make a statement on the matter. [12113/05]

Séamus Brennan (Dublin South, Fianna Fail)
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To qualify for an old age contributory pension, a person must have entered social insurance at least ten years before reaching pension age, have a minimum number of paid contributions on their record and have a yearly average of at least ten contributions paid or credited from 1953, when the unified system of social insurance came into effect, or the date of entry into social insurance, if later. All contributions made, whether made through employment or as a voluntary contributor, are counted in assessing eligibility for pension.

Since reaching 66 years in 2005, the person about whom the Deputy is concerned has been in receipt of an old age contributory pension at the rate of €89.70 per week based on a yearly average of 14 contributions. This amounts to a pension at 50% of the full personal rate. The person's date of entry into social insurance was 1969 when he paid three contributions. There is no record of him paying further social insurance until 1992-93 when he commenced paying self-employment social insurance. He then became a voluntary contributor for the years 2002, 2003 and 2004. He has a total of 520 contributions paid over a 36 year period from 1969 to 2005 resulting in a yearly average of 14 contributions, which qualifies him for a 50% old age contributory pension.

The qualifying conditions for old age pension purposes were designed to ensure those qualifying for payment have an adequate and sustained history of contributions to the social insurance fund over their working lives. However, it is accepted that it can give rise to varying results, with people with the same level of contributions receiving different rates of payment depending on when they commenced paying insurance.

The qualifying conditions for the old age (contributory) pension are being reviewed. One of the key issues being addressed as part of this review involves the possibility of a change in the method of assessment from the current one based on average contributions to a system based on the total number of contributions paid-credited over a person's working life. Such a system could give rise to practical difficulties, not least of which will be deciding on the appropriate level of contributions for pension purposes which will be required. A new system must take account of the comprehensive system of social insurance which has been in place since 1988 and the potential people now have to accumulate contributions. I expect the review to be completed in the coming months.