Written answers

Thursday, 13 December 2012

Department of Social Protection

Pension Provisions

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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To ask the Minister for Social Protection if previously self-employed persons who paid an annual PRSI contribution, and who are now unemployed, can sign for PRSI credits in order to not break their entitlement to contributory old age pension; and if she will make a statement on the matter. [56088/12]

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Self-employed persons are liable for PRSI at the Class S rate of 4% which entitles them to access long-term benefits such as State pension (contributory) and widow's, widower's or surviving civil partner's pension (contributory).

PRSI credited contributions are an integral part of the social insurance system. For the most part they are linked to having an underlying entitlement to a social welfare payment while temporarily detached from the labour force or having entitlement to statutory leave e.g. parental or maternity leave. The primary purpose of PRSI credits is to secure social welfare benefits and pensions of employees by covering gaps in insurance where they are not in a position to pay PRSI such as during periods of unemployment, illness, etc.

The class at which a contributor paid his or her last PRSI contribution determines entitlement to credited contributions. Credits are awarded in respect of an employment contribution which is defined as a contribution in respect of an employed contributor. There are no provisions for the award of credits on foot of self-employment contributions. Self-employed individuals who wish to preserve the continuity of their social insurance record for pension purposes have the opportunity to do so by becoming a voluntary contributor.

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