Written answers

Tuesday, 8 July 2008

Department of Social and Family Affairs

Pension Provisions

11:00 pm

Photo of Tom HayesTom Hayes (Tipperary South, Fine Gael)
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Question 544: To ask the Minister for Social and Family Affairs if she will clarify the way people working in partnerships with their spouses who have not been paying PRSI in their own right, will apply for a contributory State pension; the number of people she expects this change to affect; and if she will make a statement on the matter. [27202/08]

Photo of Paul KehoePaul Kehoe (Wexford, Fine Gael)
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Question 555: To ask the Minister for Social and Family Affairs if women working on farms in partnership with their spouse can qualify for a non-means tested pension in their own right; if guidelines will be published; and if she will make a statement on the matter. [27762/08]

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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I propose to take Questions Nos. 544 and 555 together.

Spouses working for self-employed contributors are specifically excepted from social insurance contributions. However, spouses who are actively engaged in a commercial partnership, including the operation of a farm, as opposed to simply being the joint owners of a property, are treated as individual self-employed contributors and are thus liable for social insurance contributions.

The Programme for Government states that 'The role and economic contribution of spouses working on the farm will be better recognised within the social insurance system'. On foot of this commitment an information leaflet, 'Working with your spouse: how it affects your social welfare contributions and entitlements', has been developed between the Department of Social and Family Affairs and the Revenue Commissioners to set out the social welfare and tax implications of families co-working in a shared business. It was published on the 25th of June, 2008.

The leaflet clarifies that spouses who operate in a commercial partnership may be brought into the social insurance system, subject to certain criteria. In this way, both spouses incur a liability to pay self-employed PRSI and build up entitlement towards a contributory state pension and other Social Welfare benefits. Application for benefits would take place in the usual way, following approval of an application for commercial partnership status and the payment of any resulting PRSI liabilities.

The Department of Social and Family Affairs and the Revenue Commissioners use the following factors to decide if a partnership normally exists:

there is a written partnership agreement (a written agreement is not required by law, however);

each partner writes cheques on the business accounts in their own right;

there is a joint business account;

it is apparent to those doing business with the partnership that a partnership exists;

business accounts and activities are in joint names of the partners;

each partner makes a significant contribution to the running of the business;

the business is owned jointly by the partnership; the profits and losses of the partnership are shared by each partner;

the business stationery reflects the existence of a partnership. An applicant should meet some of these general criteria if they are claiming to be in a partnership with their spouse.

It is not possible to estimate the number of people who may apply for commercial partnership status as a result of this publication. However, it is expected that the leaflet will be of interest to significant numbers of couples operating farms and other small business enterprises.

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