Written answers

Thursday, 8 November 2007

Department of Social Protection

Pension Provisions

5:00 pm

Photo of Olwyn EnrightOlwyn Enright (Laois-Offaly, Fine Gael)
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Question 114: To ask the Minister for Social and Family Affairs his views on allowing a time limited amnesty whereby retrospective pension contributions could be made by farmers; if short periods of employment could be excluded when applying the average rule; his views on the issue; and if he will make a statement on the matter. [27878/07]

Photo of Martin CullenMartin Cullen (Waterford, Fianna Fail)
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In order to qualify for a contributory pension a person must satisfy a range of conditions which include commencing payment of contributions 10 years before pension age, payment of a minimum of 260 contributions at an appropriate rate and reaching a minimum average annual contribution rate of at least 10 contributions paid or credited. An average of 48 contributions is needed for a full pension.

The average contribution test is a key qualifying condition and aims to ensure that those receiving a pension have demonstrated an adequate and ongoing attachment to the social insurance system over their working lives. Accordingly, the period from when a person first becomes insured until the end of the last contribution year before they reach pension age is used to assess the average contribution rate. A concession in this regard was made to self-employed persons who became compulsorily insured on the 6 th April 1988 in that any previous PRSI record they may have can be disregarded, if that is to their advantage, when eligibility for pension is being assessed.

The issue of gaps in a person's insurance record impacts on a number of different groups, not just the self-employed, and any changes being proposed would therefore have to be looked at in the context of the system as a whole. These issues are discussed in the Green Paper on Pensions, which I published on the 17 th October, and changes to the system will be considered in the context of the framework for long-term pensions policy, which will be developed after the consultation process is completed.

Eligibility to contribute to the system of social insurance is based on a person's income and employment status. There is no legislative basis, and none is planned, under which retrospective contributions, which were not due in the first place, can be accepted. It is, of course, open to those who fail to qualify for a contributory pension, or who qualify for a reduced payment, to apply for the means tested state pension (non-contributory).

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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Question 115: To ask the Minister for Social and Family Affairs the action his Department is taking to inform and assist the high number of people now in their late 50s and early 60s who may find themselves disqualified from a State pension from 2012 on the basis of the new contribution qualifying thresholds that will apply from then; and if he will make a statement on the matter. [27827/07]

Photo of Martin CullenMartin Cullen (Waterford, Fianna Fail)
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In line with the recommendations of the Final Report of the National Pensions Board, Section 12 of The Social Welfare Act 1997 (now incorporated in the Social Welfare Consolidation Act 2005) provides for amendments to the contribution conditions for the purposes of State contributory pensions. In accordance with the legislation, from April 2002 the paid contributions requirement was standardised at 260 contributions, and this will increase to 520 contributions with effect from April 2012. The planned contribution requirement has, for a number of years, been included in the Department's standard information material on pensions.

The Department is at present assessing the likely impact of the change on those who will reach pension age in 2012. The need for promotional work and other measures related to the planned change will be considered when this examination is complete.

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