Written answers

Tuesday, 18 December 2007

Department of Social and Family Affairs

Social Insurance

11:00 pm

Photo of James BannonJames Bannon (Longford-Westmeath, Fine Gael)
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Question 313: To ask the Minister for Social and Family Affairs if he will credit the work of homemakers within the social insurance system abolishing the category disregard and replacing it with a system of credits for this work; and if he will make these credits retrospective. [34844/07]

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Question 330: To ask the Minister for Social and Family Affairs if consideration might be given to allowing social welfare contribution credits in cases where one parent takes time off from work during the children's formative years; and if he will make a statement on the matter. [35588/07]

Photo of Martin CullenMartin Cullen (Waterford, Fianna Fail)
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I propose to take Question Nos. 313 and 330 together.

The social welfare pension rights of those who take time out of the workforce for caring duties are protected by the Homemakers scheme which was introduced in and took effect from 1994. The scheme allows up to 20 years spent caring for children or incapacitated adults to be disregarded when a person's social insurance record is being averaged for pension purposes. However, the scheme will not of itself qualify a person for a pension. The standard qualifying conditions, which require a person to enter insurance 10 years before pension age, pay a minimum of 260 contributions at the correct rate and achieve a yearly average of at least 10 contributions on their record from the time they enter insurance until they reach pension age, must also be satisfied. The minimum paid contributions required will increase to 520 in 2012.

These conditions are designed to ensure that those qualifying for pensions have had an adequate and sustained commitment to the social insurance system as well as to uphold the contributory principle that underpins the qualifying conditions for all social insurance payments.

While there are no plans to alter these arrangements in the immediate term, the operation of this scheme is subject to review in the context of the Green Paper on Pensions, with particular regard being paid to the operative date of the scheme and the use of credits for pension purposes rather than the current system of disregards.

A consultation process on the Green Paper is now underway and will remain open until mid 2008. The Government will respond to the views expressed during the consultation process by publishing a framework for future pensions policy and I expect that this will be available towards the end of next year.

It should also be noted that people of working age who are no longer liable for PRSI contributions may opt to protect their pension entitlements by applying to become a voluntary contributor. In order to be admitted to the voluntary contributions scheme, a person must have a minimum of 260 weeks of PRSI paid in either employment or self-employment and apply within 12 months of the end of the tax year during which they last paid PRSI or had a PRSI credited contribution. The requirement to have 260 paid contributions to gain access to the scheme is essential in that it ensures that the requisite minimum number of paid contributions required is in place to establish a contributory pension entitlement.

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