Joan Burton (Dublin West, Labour)
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Question 215: To ask the Minister for Social and Family Affairs the projected balance of the social insurance fund for end 2008, end 2009 and 2010; if she expects it to fall significantly into deficit over that period; her views on projected trends in the fund's balance; if she proposes corrective measures to ensure that the fund remains broadly in balance or in surplus; and if she will make a statement on the matter. [39037/08]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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It is currently estimated that the balance of the social insurance fund will be approximately €3.4 billion, based on an expected annual deficit of €223 million, at end 2008. For end 2009, the balance is estimated to be €2.5 billion, based on an expected annual deficit of €900 million. A projected outturn for 2010 has not yet been finalised.

These estimates are similar to those of the second Actuarial Review of the Social Insurance Fund, which was required under Section 10 of the Social Welfare (Consolidation) Act, 2005, and published on 17th October 2007 in conjunction with the Green Paper on Pensions.

The findings of the Review included:

That the Fund will move from being in surplus to running a deficit in 2009;

That on foot of the annual deficits from 2009, the accumulated surplus of the fund will be exhausted by 2016.

However, in the light of current economic circumstances it is now expected that the accumulated surplus will be exhausted prior to 2016.

In this regard it should be noted that legislation provides that the exchequer is the residual financier of the fund and exchequer contributions to cover any shortfalls in contributions were the norm for over forty years. No exchequer contribution has been required since 1996 as the fund has been in surplus on foot of contributions from employers and workers. Any shortfall in the fund, in meeting the cost of benefits paid, would in the normal way be addressed by exchequer subvention.

Issues relating to social insurance contribution rates, payments, and possible future exchequer subventions to the fund, would have to be considered in a budgetary context.