Andrew Doyle (Wicklow, Fine Gael)
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133. To ask the Minister for Social Protection if she will provide a detailed explanation regarding credits for past periods of employment for the benefit of receiving social welfare; the lapse periods that are currently in operation and the reason they exist; if a person is permitted to buy back their credits; if she will provide a detailed outline of all the rules in place; when each of the rules currently in place came into effect; and if she will make a statement on the matter. [40216/13]

Joan Burton (Dublin West, Labour)
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PRSI credited contributions (“credits”) 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.

In order to qualify for credits, a person must first have entered insurable employment - he or she must have paid at least one PRSI contribution as an employed contributor. Subsequently, insured workers may be awarded credits if they claim a social welfare payment because they are out of work, or they are ill or incapacitated, or if they are engaged in certain training or educational courses. If at any stage in their working life, a person has no PRSI paid or credited contributions for two full tax years, they cannot be awarded credits again until they return to work and pay PRSI contributions for at least 26 weeks.

The PRSI class at which a contributor paid his or her last PRSI contribution while working, determines the type of credits which may be awarded. Those whose last paid PRSI contribution was at Class A may be awarded Class A credits. Those who paid PRSI, for example, at Class D (modified rate contributor) may only be awarded Class D credits.

Credits do not, on their own, give an individual entitlement to social insurance benefits. They may, however, may assist insured workers to qualify for various social insurance benefits. While the contribution conditions applying to the various social insurance schemes can vary, a claimant must, in general, have:

(a) paid a minimum number of weekly contributions (ranging from 52 for short term benefits to 520 in the case of pensions), and

(b) a certain number of contributions or credits over a specified period. In the case of short term benefits the number of contributions or credits relates to the relevant tax year. In the case of long-term benefits (e.g. pensions) this is on the basis of the yearly average number of contributions and/or credits over the person's working life.

Credits cannot be used to satisfy condition (a). Thus, credits are only of value to a person who satisfies this "paid contribution" test.

The system of credits and the conditions governing the award of credits have evolved over a number of years. When the consolidated system of social insurance was set up under the Social Insurance Act 1952, it was based on the principle that once a person became insured under the Act, that individual would be able to maintain their status as an insured person and their entitlements to various benefits of the system. Since then the system of credits has developed in line with the development of new schemes and payments. The current legislative provisions governing the award of credits are contained in S.I. No. 312 of 1996. Further details relating to credits and the conditions applying to the various social insurance schemes can be found on the Department's website .

Individuals are not permitted to buy back credits in relation to an earlier period of their working life. They may, however, be in a position to establish an underlying entitlement to credits for that period of time. Individuals, who cease to be covered by compulsory social insurance, may opt to protect their existing long-term social insurance pension entitlements by becoming insured on a voluntary basis and paying voluntary ccontributions. A person who wishes to become a voluntary contributor must satisfy certain contribution conditions and must apply to become a voluntary contributor within 12 months after the end of the contribution year in which he/she was last compulsorily insured.