Paudge Connolly (Cavan-Monaghan, Independent)
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Question 175: To ask the Minister for Social and Family Affairs his views on the anomaly whereby farmers may make voluntary contributions towards contributory pensions at age 65 from age 55 onwards, whereas the farmer's wife is precluded from so doing; if he will take steps to eliminate this discrimination against farmer's wives and lack of recognition of wives contribution to farm management; and if he will make a statement on the matter. [35905/06]

Séamus Brennan (Dublin South, Fianna Fail)
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Spouses of an employed or self-employed contributor are specifically excepted from social insurance contributions. This exclusion recognises the practical difficulties in establishing the nature of a genuine employment relationship in circumstances such as when a person employed under a contract of service (i.e. as an employee) by his or her spouse is classed as an "excepted" contributor under social welfare law. As a result, farming spouses, in common with spouses of other self-employed persons, can only pay PRSI contributions in one of three scenarios.

Firstly, spouses who are actively engaged in a commercial partnership (as opposed to simply being the joint owners of a property) are treated as individual self-employed contributors and are thus liable to social insurance contributions. These contributions — made under PRSI Class S — enable them to build up an insurance record in their own right and to receive accruing benefits. Liability for PRSI contributions is not contingent on the ownership of property but rather on the nature of the business arrangements between the couple. Co-ownership of property does not in itself create a partnership.

Secondly, where a family business or farming enterprise is incorporated as a limited company, spouses involved in the business can establish a social insurance record as either employees or as self-employed contributors — depending on whether a contract of service exists.

Finally, if the spouse is engaged in "off-farm" employment, they will pay social insurance contributions in their own right. This enables farming spouses who might otherwise not be insured to develop a social insurance record on the basis of their "off-farm" earnings.

I would also point out that the exception of spouses from PRSI liability in relation to a shared occupation does not preclude them from accessing the voluntary contributions scheme. Access to this scheme requires a minimum number of 260 paid contributions. Where a person has been previously insured as an employee or as a self-employed person, is no longer compulsory insured and is under 66 years of age, he or she can opt to pay voluntary social insurance contributions. These contributions will maintain social insurance cover for pensions such as Retirement, State (Contributory) and Widow's or Widowers' (Contributory) as well as for the Guardian's Payment (Contributory) and the Bereavement Grant — depending on the rate at which the voluntary contribution has been paid. Voluntary contributions maintain the pension coverage at the level equivalent to that when the person was last compulsorily insured. The amount to be paid as a voluntary contribution is at a percentage of annual income. For those who were previously self-employed, the voluntary contribution is paid at a fixed amount of £253 per annum.

The legislation that exempts spouses who assist in family enterprises — such as farming — from liability to social insurance has been the subject of review on a number of occasions.

In 2005, the 'Fully-Inclusive Social Insurance Model' (FISIM) group, established under the social partnership agreement, and which included representatives from various local and national farming organisations, considered how the social insurance framework in Ireland should develop to become more inclusive. The report of the group acknowledged the significance of the partnership option and recommended that more information on the tax and social welfare implications of families working in either a partnership or limited company be made available. This recommendation is currently being progressed.

I consider that the current arrangements are not discriminatory and represent a reasonable response to the social security requirements of spouses and assisting relatives. There are no immediate plans to alter the arrangements outlined above.