John Deasy (Waterford, Fine Gael)
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Question 466: To ask the Minister for Social and Family Affairs if her attention has been drawn to the fact that her press release on 3 July 2009 encouraged women who had been working in commercial business partnerships to explore their entitlement to contributory State pensions bringing them as equal partners into the social insurance scheme and that her Department is now telling these applicants that due to the fact that a paid contribution had not been in their own name prior to their 66th birthday they no longer have an entitlement and in fact persons already awarded this pension will have same removed; her views on whether this is unjust in view of the fact that the contribution was paid by their spouses but that many women working in family businesses had no idea that they held an entitlement until this was highlighted by her Department; if she has changed her mind regarding commercial partnerships; if she will provide clarification; if she will ensure that women are included where they have established an entitlement; and if she will make a statement on the matter. [3664/10]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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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. In these cases, both spouses are liable to pay PRSI (Class S) contributions in a timely manner.

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 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 25 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. It is open to any person to apply for recognition of a commercial partnership.

Approximately 1,000 people applied for partnership under the scheme by showing that they were in partnership with their spouses. Of these, 579 cases have been decided on the basis of whether or not they qualify as a partnership. Some 508 of those were deemed to have a partnership in existence. Of those, 268 applied for a State Pension (Contributory). One condition for receiving State Pension (Contributory) is that the person must have paid one years contributions before reaching pension age. Unfortunately a number of claimants who failed to meet this condition were authorised for payment of the pension. When their cases were reviewed the error was discovered and revised decision was made disallowing the claim. To date 85 claims for State Pension (Contributory) which were in payment have been disallowed and 16 customers have had their rates reduced. A further 46 customers have failed to satisfy the qualifying conditions State Pension (Contributory) and accordingly their claims have been refused.

The qualifying conditions for State Pension (Contributory) require the applicant to have entered insurable employment before attaining the age of 56 years; have at least 260 paid contribution weeks since entry into insurance; satisfy the yearly average condition.

In addition, Section 110 (1) of the Social Welfare (Consolidation) Act 2005 provides that a self-employed contributor shall not be regarded as satisfying the qualifying conditions unless (a) the person has paid self-employment contributions in respect of at least one contribution year before attaining pensionable age, and (b) all self-employment contributions payable by him or her have been paid.

It is open to any person to apply for recognition of a commercial partnership. However, to be eligible for State Pension, the legislation stipulates that at least 52 self-employment contributions must be paid by a person before they reach 66 years of age. Contributions paid by a pension applicant's spouse do not satisfy this condition.

Overpayments will be determined in these cases. The persons concerned will be notified and requested to repay the amount involved. However a Recovery Officer may reduce or cancel an overpayment based on the circumstances of an individual case, in line with governing legislation.

It should be noted that while the publication of the leaflet "Working with your spouse: how it affects your social welfare contributions and entitlements" clarified existing procedures in relation to the recognition of commercial partnerships between husbands and wives for social insurance purposes, including retrospective payment of social insurance, it did not involve a change in existing policy or administration. In particular, the clarification of the position did not alter people's potential entitlements and all applicants for the state pension (contributory) must continue to satisfy the eligibility conditions as contained in legislation, and outlined above.

The Department understands and apologises for the upset and distress caused to all persons concerned and regrets the administrative error involved.

John Deasy (Waterford, Fine Gael)
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Question 467: To ask the Minister for Social and Family Affairs the number of persons who applied under the commercial partnership status for inclusion in the social insurance system that will have their pensions removed; if the pensions already awarded must be refunded; and if she will make a statement on the matter. [3665/10]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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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. In these cases, both spouses are liable to pay PRSI (Class S) contributions in a timely manner. In addition, to qualify for a State Pension (Contributory), at least one year's contributions must be paid before reaching pension age.

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 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. It is open to any person to apply for recognition of a commercial partnership.

The qualifying conditions for State Pension (Contributory) require the applicant to have entered insurable employment before attaining the age of 56 years; have at least 260 paid contribution weeks since entry into insurance; satisfy the yearly average condition.

In addition, Section 110 (1) of the Social Welfare (Consolidation) Act 2005 provides that a self-employed contributor shall not be regarded as satisfying the qualifying conditions unless (a) the person has paid self-employment contributions in respect of at least one contribution year before attaining pensionable age, and (b) all self-employment contributions payable by him or her have been paid.

Section 110 (1)(a) of the Social Welfare Consolidation Act, 2005, has been on the statute books for over fifteen years and there has not been a change in policy in relation to the requirement to have paid at least one year's self employment contributions prior to reaching age 66, in order to qualify for a State Pension (Contributory).

Approximately 1,000 people applied for recognition of a commercial partnership with their spouses. Of these, 579 cases have been decided on the basis of whether or not they qualify as a partnership. Some 508 of those were deemed to have a partnership in existence. Of these 268 have applied for a State Pension (Contributory). However, following a review it was found that the self-employment contributions were all paid by the persons concerned after their 66th birthday. The people concerned did not therefore satisfy the condition at (a) above and has no entitlement to a State Pension (Contributory), and should not have been put into payment under this scheme. 85 claims for State Pension (Contributory) which were in payment have been disallowed and 16 customers have had their rates reduced. A further 46 customers have failed to satisfy the qualifying conditions for State Pension (Contributory) and accordingly their claims have been refused.

Overpayments will be determined in these cases. The persons concerned will be notified and requested to repay the amount involved. However a Recovery Officer may reduce or cancel an overpayment based on the circumstances of an individual case, in line with governing legislation.

It should be noted that while the publication of the leaflet "Working with your spouse: how it affects your social welfare contributions and entitlements" clarified existing procedures in relation to the recognition of commercial partnerships between husbands and wives for social insurance purposes, including retrospective payment of social insurance, it did not involve a change in existing policy or administration. In particular, the clarification of the position did not alter people's potential entitlements and all applicants for the state pension (contributory) must continue to satisfy the eligibility conditions as contained in legislation, and outlined above.

The Department understands and apologises for the upset and distress caused to all persons concerned and regrets the administrative error involved.