Bernard Durkan (Kildare North, Fine Gael)
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Question 453: To ask the Minister for Social Protection the current value of the social welfare reserve fund; the extent to which this has fluctuated in each of the past five years to date; and if he will make a statement on the matter. [39203/10]

Éamon Ó Cuív (Galway West, Fianna Fail)
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I understand from the Deputy that his question refers to reserves of the Social Insurance Fund. The Social Insurance Fund finances expenditure on insurance based welfare benefits. It held cash equivalent reserves of €890 million at the beginning of 2010. The amount by which income exceeded expenditure has fallen consistently since 2006 and the Fund has run an annual deficit since 2008, using accumulated reserves to supplement the funding required for benefit payments. These cash reserves were exhausted earlier this year. The shortfall between Fund income and expenditure is being met by way of subvention from the Department's Vote 38.

It is important to note that traditionally, social insurance spending has been funded on a tripartite basis – with contributions coming from the exchequer, employers and employees. The exchequer is the residual financier of the Fund and exchequer contributions were the norm for over forty years - for example, in 1967, the state contribution was 38% of Fund expenditure and almost 29% in 1985. However, no exchequer contribution was required between 1996 and 2009 as the Fund was in surplus on foot of contributions from employers and workers.

An actuarial review of the Social Insurance Fund, undertaken in 2005, which covered the period from 2006 to 2061, highlighted that progressive action is required if future costs, including pensions, are to be met. This will involve finding an appropriate balance between the three strands of the tripartite funding system.

The following table sets out the balance in the Social Insurance Fund over the past five years: