Róisín Shortall (Dublin North West, Labour)
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Question 243: To ask the Minister for Social and Family Affairs his estimate of the cost of meeting future pensions and other commitments from the Social Insurance Fund up to 2055 under the assumptions used in the recent review of the Social Insurance Fund and assuming income from the National Pension Reserve Fund; and the estimated average percentage increase in PRSI rate if all of these costs were to be paid by contributors. [30329/07]

Martin Cullen (Waterford, Fianna Fail)
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The Social Welfare Consolidation Act 2005 requires the Minister for Social and Family Affairs to arrange for an actuarial review of the financial condition of the Social Insurance Fund to be made every five years. The most recent actuarial review, which covers the period from 2005 to 2061, was published on the 17th October 2007.

One of the Review's principal findings was that, based on a central scenario with stated assumptions about demographic, economic and benefit developments over the period (the last assuming that future benefits will increase in line with future earnings), PRSI rates would have to increase over their present levels if income and expenditure on the Fund is to be balanced over the long term to 2061. However, the Review estimated that if no change is made to PRSI contribution rates over that period, Social Insurance Fund expenditure would exceed Social Insurance Fund income by €35.3 billion by 2061.

In such a situation and assuming no other change, the Exchequer, as residual financer of the Social Insurance Fund, would have to cover that shortfall. While the proceeds of the National Pension Reserve Fund, which has been established for the purpose of meeting as much as possible of the cost to the Exchequer of social welfare pensions and public service pensions from the year 2025 until the year 2055, or such subsequent years as may be specified, will be available to meet some of these Social Insurance Fund subvention costs over some or all of this period, the Actuarial Review did not make any assumption about the scale of funds that would be available to the Social Insurance Fund from the National Pensions Reserve Fund for that purpose, nor did it make an estimate of the scale of increases in the levels of income taxation, or indeed any other taxation head, that would be necessary to meet a shortfall in the Social Insurance Fund over the longer term assuming no change to the existing PRSI regime or otherwise.

It should also be noted that the projected shortfall on the Social Insurance Fund (based on stated assumptions) that would have to be covered by the Exchequer out to 2061 is only one of the many long term social welfare and other demands that would have to be financed by the Exchequer and that income taxation is only one of the range of income sources that would be available to the Exchequer to meet these demands.