Michael Ring (Mayo, Fine Gael)
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Question 1314: To ask the Minister for Social and Family Affairs the position in relation to her recent announcement regarding the eligibility of people who work with their spouses in a partnership for a contributory State pension; the way in which people apply for same; the stages from application to approval; the way in which they prove they were working with their spouses; the date from which they can claim partnership status; the number of people involved; and the cost of making such a provision. [30509/08]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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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 to social insurance contributions.

On foot of a Programme for Government 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 & 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 25 th 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. Retrospective liability to pay self-employed PRSI can, depending on the circumstances of each case, be incurred from 1988, when self-employed PRSI was introduced. Application for benefits would take place in the usual way, following any 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 exist 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. If they cannot do this, they will be deemed not to be in a business partnership. It is not possible to estimate the number of people, and resulting costs, who may apply for commercial partnership status as a result of this publication. However, the leaflet will be of interest to significant numbers of couples operating farms and other small business enterprises. Persons interested in applying for partnership status should firstly study a copy of the leaflet, available from the Information Section of the Department or at www.welfare.ie , which sets out the application procedure in detail.