Olwyn Enright (Laois-Offaly, Fine Gael)
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Question 117: To ask the Minister for Social and Family Affairs his views on the extension of eligibility for the special 50% state contributory old age pension to be extended to those aged between 60 and 65 years in April 1988; his views on the special pension rate to the group aged between 56 and 60 years in April 1988 being increased from 50 per cent to 75 per cent; and if he will make a statement on the matter. [27888/07]

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. This special pension covers some of the group aged between 60 and 65 referred to by the Deputy. To qualify, a person must have been age 56 or over on 6 April 1988, started paying social insurance contributions as a self-employed person on or after this date and have at least 260 full-rate social insurance contributions paid on a compulsory basis since first starting to pay social insurance contributions as a self-employed person. The personal rate and increases for a qualified adult and a qualified child are paid at 50% of the standard maximum rate.

The pension element of PRSI paid may be refunded in the case of contributors who entered insurable employment after they had attained the age of 56 and who have no entitlement to any State Pension.

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 my view, this remains the position.

Olwyn Enright (Laois-Offaly, Fine Gael)
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Question 118: To ask the Minister for Social and Family Affairs his views on the State non contributory pension permitting the earning of an equivalent amount of farm income to that applied to employment income; and if he will make a statement on the matter. [27889/07]

Martin Cullen (Waterford, Fianna Fail)
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A new pension scheme, known as State Pension (Non-Contributory) was introduced in September 2006 and incorporated all means-tested schemes for people aged 66 or over. As part of this reform, the basic income disregard for the purposes of the means test for non-contributory pensions was increased to €20 per week and a new disregard on earnings from employment of €100 per week was introduced to encourage pensioners who wished to continue in employment or to return to employment. Budget 2007 increased the basic means disregard to €30 per week in addition to increasing the earnings disregard to €200 per week.

The earnings disregard of €200 per week does not apply to income from any other source such as self-employment including farming or rents from leasing property. Income from sources other than employment, including pensions and capital, is covered by the enhanced general means disregard of €30 per week.

However, it should be noted that in contrast to persons in employment, expenses necessarily incurred in carrying out any form of self-employment have always been disregarded when calculating means from self-employment. This means that such earnings are assessed net of expenses incurred by the person in the course of their work e.g. on petrol/diesel, purchase of equipment and raw materials, etc. There are also special arrangements for farmers participating in the REPS and SACS schemes. The first €2,540 of all income from these schemes is not assessable for means test purposes and 50% of any balance is assessed. Expenses necessarily incurred in order to participate in these schemes are also disregarded.

The effectiveness of means testing arrangements are kept under review and, where appropriate, changes are considered in a Budgetary context.