Written answers

Thursday, 27 September 2007

Department of Social and Family Affairs

Pension Provisions

5:00 pm

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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Question 96: To ask the Minister for Social and Family Affairs the reference under EU regulation EEC No. 1408/07, including article and paragraph, that allows Ireland apply the (AxB)/C formula (details supplied) to State pension applicants who wish to combine their Irish social security contributions with those of another EU country; the statutory instrument and reference within that statutory instrument where this formula is provided for in Irish pension legislation; and if he will make a statement on the matter. [21207/07]

Photo of Martin CullenMartin Cullen (Waterford, Fianna Fail)
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The social security rights of people living and working in the EU are governed by EU Regulations 1408/71 and 574/72. The Regulations co-ordinate social security systems and are designed to ensure that people are not disadvantaged by moving within the EU to take up work. This is achieved primarily by setting out rules as to which State's social security system covers a person when, for example, s/he moves from one Member State to another to take up work or where s/he lives in one State and works another. In addition, the Regulations also set out rules as to which State will pay benefit in the event of the sickness, unemployment old-age etc.

The general rule is that a person is insured in the State in which s/he works and the State of employment has, in general, responsibility for paying benefits when, for example, a person becomes unemployed or ill. The Regulations also provide that when entitlement to benefit is being examined account must be taken of insurance paid in any other Member State where the person worked. In the case of pensions, in general, a person will get a pension from each State in which s/he worked in proportion to the periods of insurance completed in each Member State.

These rules are set out in Chapter 3 of Title III of Regulation (EEC) 1408/71. Article 46(2)(a) provides that each State in which a person has been insured must first calculate the theoretical amount of pension i.e. the pension to which a person would be entitled if s/he had completed all periods of insurance under the legislation of that State. Article 46(2)(b) provides that each State must then calculate the proportioned pension i.e. by multiplying the theoretical amount of that State by the result of the ratio of periods of insurance in that State to the full insurance record of the person concerned.

For administrative and customer service reasons these calculations are referred to in the Departmental Guidelines by the formula (A x B)/C, where A is the theoretical amount of pension; B is the number of contributions paid in Ireland; and C is the number of contributions paid in total (i.e. in Ireland and other Member State/s).

Regulation 1408/71 is directly applicable in all Member States and therefore transposition measures in national legislation are not required. Accordingly, it is not necessary to provide for this formula in Irish legislation.

If the Deputy has a particular case she may wish to contact my office for further assistance.

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