Denis Naughten (Roscommon-South Leitrim, Fine Gael)
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Question 611: To ask the Minister for Social and Family Affairs his plans to allow persons to continue to work and pay PRSI pension contributions beyond pension age to gain eligibility for an old age contributory pension; and if he will make a statement on the matter. [20897/07]

Martin Cullen (Waterford, Fianna Fail)
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The State Pension (Contributory) is a social insurance payment made to both employed and self-employed persons aged 66 or over who started paying social insurance contributions before reaching age 56. The standard qualifying conditions for contributory pensions require a person to enter insurance 10 years prior to pension age, pay a minimum of 260 contributions at the correct rate and achieve a yearly average of at least 10 contributions on their record from the time that they enter insurance until they reach pension age. These conditions are designed to ensure that those qualifying for pensions have had an adequate and sustained commitment to the social insurance system as well as to uphold the contributory principle that underpins the qualifying conditions for all social insurance payments.

There is no legal basis on which to accept contributions — retrospective or otherwise — apart from where a worker has a liability that is set out in legislation. Any such practice would be outside the scope of the legislative provisions that are currently in force.

People of working age who are no longer liable for PRSI contributions may opt to protect their pension entitlements by applying to become a voluntary contributor. In order to be admitted to the voluntary contributions scheme, a person must have a minimum of 260 weeks of PRSI paid in either employment or self-employment and apply within 12 months of being insurable.

The requirement to have 260 paid contributions to gain access to the scheme is essential in that it ensures that the requisite number of paid contributions required is in place to establish a contributory pension entitlement.

It is important that those who wish to continue in employment after the normal retirement age should, as far as possible, be facilitated and supported. Longer working lives can prove to be beneficial to the individual and, more significantly, can play an important role in ensuring that our pensions system is sustainable in the future.

The National Pensions Review — published in January, 2006 — includes recommendations from the Pensions Board aimed at encouraging people to continue working after the normal retirement age. The measures suggested involve allowing people to defer the receipt of their social welfare pension at the normal retirement age and granting them an actuarially-enhanced payment when they claim. The Pensions Board also considered that, if this was combined with allowing those with less than full entitlements to count contributions made after age 65 or The National Pensions Review — published in January, 2006 — includes recommendations from the Pensions Board aimed at encouraging people to continue working after the normal retirement age. The measures suggested involve allowing people to defer the receipt of their social welfare pension at the normal retirement age and granting them an actuarially-enhanced payment when they claim. The Pensions Board also considered that, if this was combined with allowing those with less than full entitlements to count contributions made after age 65 or 66 in order to improve their contribution record, this would complete the incentives for longer working within the social welfare pensions system.

It should also be noted that the Government is currently committed, as part of the 'Towards 2016' social partnership agreement, to develop a Green Paper on all aspects of the pensions system — including social welfare pensions. It is expected that the Green Paper will be published shortly. A consultation process will then take place and the Government will respond to this by publishing a framework for future pensions policy.