Written answers

Wednesday, 2 April 2008

Department of Social and Family Affairs

Pension Provisions

9:00 pm

Photo of Pat BreenPat Breen (Clare, Fine Gael)
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Question 547: To ask the Minister for Social and Family Affairs his views on the introduction of a contributory old age pension to carers; and if he will make a statement on the matter. [11234/08]

Photo of John O'MahonyJohn O'Mahony (Mayo, Fine Gael)
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Question 567: To ask the Minister for Social and Family Affairs if he will arrange for recipients of the carers allowance to make voluntary social welfare contributions which would enable the carer to qualify for a contributory pension in due course; and if he will make a statement on the matter. [11869/08]

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Question 591: To ask the Minister for Social and Family Affairs if he will examine the prospect of awarding social welfare credits for pension purposes to carers who will not otherwise qualify for old age pension in their own right; and if he will make a statement on the matter. [12454/08]

Photo of Martin CullenMartin Cullen (Waterford, Fianna Fail)
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I propose to take Questions Nos. 547, 567 and 591 together.

In order to qualify for the maximum rate of the state pension (contributory) a person must, amongst other qualifying conditions, achieve a yearly average of at least 48 contributions paid or credited on his/her social insurance record over their working life. Reduced pensions are paid to those with yearly averages as low as 10 contributions. Arrangements are also in place to cater for those with social insurance contributions at different rates, with contributions from other EU member States or countries with which Ireland has reciprocal social security agreements and with pre-1953 contributions.

The range of different payments available has made it easier for people to qualify for a contributory pension. Measures are also in place to protect the social welfare pension entitlements of those who leave work to care for sick or elderly relatives. People who qualify for payments such as carer's allowance or carer's benefit may, subject to conditions, qualify for credited contributions. The homemaker's scheme, which was introduced in and took effect from 1994, 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. This scheme applies to people who take time out of the workforce for caring duties but who do not qualify for credits through the carer's allowance or benefit schemes.

Any person, including a carer, may pay voluntary contributions once they satisfy certain qualifying conditions. Voluntary contributions allow a person to remain insured once they leave the compulsory PRSI system. A person may choose to pay voluntary contributions, provided they are no longer covered by a PRSI scheme on a compulsory basis in Ireland, are no longer covered by a PRSI scheme on a compulsory or voluntary basis in any other E.U. country, are under age 66 and satisfy the qualifying conditions. Voluntary contributions provide cover for long-term benefits, such as pensions.

To become a voluntary contributor a person must have paid at least 260 PRSI contributions in either employment or self-employment and apply within 12 months of the end of the contribution year during which they last paid compulsory insurance or were last awarded a credited contribution. The person must agree to pay voluntary contributions from the start of the contribution week that follows the week in which they left compulsory insurance.

From June 2006 the number of hours a person can engage in employment, self employment, education or training outside the home and still be eligible for carer's allowance, carer's benefit and the respite care grant was increased from 10 to 15 hours per week. Where a carer remains in employment he or she will continue to pay the appropriate social insurance contribution.

Overall, I am satisfied that adequate arrangements are in place to protect the pension entitlements of people who leave employment to provide full-time care so that they can qualify for a contributory pension. There are, of course, people caring who cannot benefit from these measures. The position of these, and others who are at present not receiving support through the social welfare pension system, is considered in the Green Paper on Pensions. A consultation process on the Green Paper is now underway and will remain open until end of May.

The Government will respond to the process by publishing a framework for future policy on all aspects of pensions and I expect that this will be finalised before the end of the year. The position of those who are at present without a contributory pension entitlement will be considered in that context.

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