Martin Cullen (Waterford, Fianna Fail)
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Spouses working for self-employed contributors 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 if they are involved 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. A partnership is commonly understood to be an association of two or more persons for the purpose of gain or of sharing in the work and profits of an enterprise. 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, a spouse engaged in off-farm employment, will pay social insurance contributions in his or her 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.

An information leaflet is currently being developed between the Department of Social & Family Affairs and the Revenue Commissioners to set out the social welfare and tax implications of families co-working in a shared business. It has been agreed with the farming representatives that their views and input will feed into this process to ensure the new publication meets with their information needs and is customer orientated. It is hoped to publish the new information leaflet by end 2007.

Under the Programme for Government there is a commitment to improve the income limits associated with the qualified adult allowance to enable more people to qualify for it. The limits will be reviewed in the context of the budget.

On a more general note, issues relating to means testing of qualified adult pension payments are discussed in the Green Paper on pensions and decisions in this regard will be made in the context of the consultation process which is now underway and the development on the framework for long-term pensions policy.

Martin Cullen (Waterford, Fianna Fail)
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It is a fundamental principle of our social insurance system that those qualifying for benefits must satisfy a range of contribution and other conditions. In the case of contributory pensions, this involves commencing payment of contributions 10 years before pension age, payment of a minimum number of contributions at an appropriate rate and reaching a minimum average annual contribution rate. The state pension (contributory) is a valuable benefit and the conditions are designed to ensure that those qualifying have had a sufficient and ongoing attachment to the social insurance system.

A special pension for the self-employed was introduced in 1999 to enable people who were over age 56 at the time of the introduction of PRSI for the self-employed in 1988, and who could not therefore meet the standard qualifying conditions, to receive a contributory pension. The qualifying conditions require payment of 260 contributions. At present there are about 3,300 such pensions in payment.

The arrangements introduced in 1999 are designed to give some recognition under the social welfare pensions system to a group of people who would not otherwise qualify for any payment, contributory or means tested. The pension was considered a reasonable response to the position this particular group of people found themselves in, and it represents very good value for the level of contributions paid.

In the absence of a full assessment of the insurance records of those concerned, it is not possible to give an actual cost of converting this pension to a pro-rata payment related to the actual number of contributions made. A rough estimate of the cost, including the granting of a pro-rata increase for qualified adults, would be approximately €9 million per annum. However, the true cost of such a measure could be far higher as, in equity, it would be difficult to enhance the pensions of this group of pensioners without considering the position of other people such as those receiving the special pension based on pre 1953 social insurance contributions, or possibly, other people receiving standard rate reduced pensions.

As already said, when introduced, this pension was considered a reasonable response to the situation that existed at the time and, in my view, this remains the position.