Denis Naughten (Roscommon-South Leitrim, Fine Gael)
Link to this: Individually | In context

Question 567: To ask the Minister for Social and Family Affairs his views on the fact that pensioners who worked in semi-State companies do not qualify for the State pensions; if he plans to address this situation; and if he will make a statement on the matter. [19735/07]

Martin Cullen (Waterford, Fianna Fail)
Link to this: Individually | In context

The class of social insurance applicable to people in semi-state companies who were recruited prior to 6 April 1995 is PRSI Class D, paid at a modified rate. This provides social insurance coverage for a limited range of benefits as it was considered that the sick pay and occupational pension arrangements available to people employed in semi-state companies were such that they did not require such cover under the social welfare system.

People employed after April 1995 pay full rate insurance contributions and are eligible for the full range of social welfare benefits, including contributory pensions. However, their occupational pension arrangements have been adjusted to reflect this change, with the occupational pension and the social welfare pension integrated to provide the overall level of pension promised, which in most cases is 50% of final salary.

The basic qualifying conditions for contributory pensions have been eased considerably in recent years to enable as many people as possible to qualify for contributory social welfare pensions. Special pensions based on pre-1953 insurance have been introduced, and arrangements made so that people with a mixture of insurance at full and modified rates may qualify for pro-rata pensions based on the percentage of full rate contributions in their overall insurance record. These measures have been implemented in a way that ensures that people have sufficient and ongoing attachment to the social welfare system by achieving a minimum standard of contributions, both in terms of the number and type of contributions paid. In addition to the changes in the conditions for the state pension (contributory) the means test for state pension (non-contributory) has also been improved which should assist those receiving small occupational pensions to qualify for a social welfare payment.

Some 125,000 people are insured in the three main modified insurance classes in addition to large numbers already receiving occupational pensions. Accordingly, any proposals to allow modified rate contributors to qualify for a state pension would have very costly and long-running implications for the system.

The Government is committed to publishing a Green Paper on pensions under Towards 2016. The discussion in the Green Paper will, amongst other things, deal with the question, in the wider sense, of those who do not qualify for any support, contributory or non-contributory, under the social welfare pensions system and will set out the implications of making provision for them. I expect that the Green paper will be published shortly. Following publication a consultation process will take place prior to Government deciding on a framework for long-term pensions policy in all areas of pension provision.