Regina Doherty (Meath East, Fine Gael)
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104. To ask the Minister for Social Protection the reason behind the severing of the half-rate social welfare payment to widows or widowers who are in receipt of a pension payment; the reason for continued deductions of pay-related social insurance from those widows and widowers who are still in the workforce and who will not get to benefit from those deductions; and if she will make a statement on the matter. [16794/15]

Joan Burton (Dublin West, Labour)
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The social welfare system is primarily a contingency-based system, with entitlement based on a number of defined contingencies such as sickness, unemployment, old age or widowhood.

There are two basic principles which underpin the Irish social insurance system. Firstly there is the contributory principle. Under this principle there is a direct link between the PRSI contributions that a person has paid and entitlement to a varying range of benefits and pensions. Where a person has sufficient PRSI contributions, then benefits and pensions may be paid as of right, where a particular contingency arises and without a means test.

Secondly there is the solidarity principle. Under this principle the benefits and pensions that are paid are not directly related to the amount of PRSI contributions paid by insured persons. PRSI contribution income is instead redistributed to support contributors who are more vulnerable. In this regard, it should be noted that some PRSI contributors do not experience all of the contingencies during their life, or may not be in a position to benefit from one or more such payment. For example, one contributor may never require access to Invalidity Pension whereas it may be a crucial support for another. Similarly, there will be many contributors who would not require coverage for Maternity Benefit, but who nevertheless continue to be levied PRSI at the full rate during their working years.

In addition, there is a general principle of one person, one payment, which applies across the whole of the social welfare system. Given the contingency-based nature of this system, it can happen that a person may experience more than one contingency at the same time. For example, an unemployed person may become sick. As a consequence, if a person experiences more than one of these contingencies at the same time, he or she can receive only one of those payments. This principle is common to social security systems across the world.

There were a limited number of exceptions in the social insurance system to the general principle of one person, one payment. These exceptions usually applied in the context of short-term benefits. For instance, recipients of One-Parent Family Payment, Widows and Widowers Pensioners etc. could, until recent years, also receive short-term social insurance benefits, such as Illness Benefit and Jobseeker’s Benefit at half-rate at the same time.

These overlapping payment arrangements were introduced in the early 1950s when the social insurance system was first established, at a time when there were only 10 individual social welfare payments and when rates were significantly lower in real terms than they are now.

The social welfare system has been significantly developed over the intervening period, with the result that the number of possible combinations of concurrent contingencies has increased greatly.

In the context of the difficult fiscal environment in recent years and the Government’s commitment to maintain existing core rates of primary payments for social welfare recipients, the concurrent payment of half-rate Illness Benefit and Jobseeker’s Benefit in addition to One-Parent Family Payment, Widows and Widowers Pensions etc. was discontinued from January 2012.

It is realistic and prudent to maintain the underlying principle of entitlement to only one payment at any one time, that is, one person, one payment. To do otherwise could potentially involve very significant and unsustainable additional expenditure in the long-term.

Finally, it should be noted that the Actuarial Review of the Social Insurance Fund, published in 2012 found that Fund has a strong redistributive nature. This is demonstrated by the fact that those on lower incomes fare considerably better than those on higher incomes and the Fund provides better value to female rather than male contributors.

Willie Penrose (Longford-Westmeath, Labour)
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105. To ask the Minister for Social Protection if she will take steps to ensure that appropriate credits are provided for persons who had to leave the workforce due to the marriage bar in the early 1970s, as this is having an impact upon their ability to receive appropriate pensions at this point in time; and if she will make a statement on the matter. [16806/15]

Joan Burton (Dublin West, Labour)
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The ‘marriage bar’, a requirement that women leave paid employment on entering marriage, was a condition of employment within most sectors of the public service until 1973. A number of private sector employers operated similar restrictions at that time, generally in respect of ‘white collar’ positions, notably in the financial sector. The marriage bar was abolished in the public service in 1973, and similar provisions in the private sector were made illegal in 1977, by legislation prohibiting discrimination in employment on grounds of sex.

Issues relating to public sector employment and pensions are the responsibility of the Minister for Public Expenditure and Reform. In general, civil and public servants recruited at that time paid a modified rate of PRSI (i.e. not the full Class A rate) which gave coverage for widow(er)'s and orphan's pensions, occupational injury benefit, bereavement grant and carer’s benefit only. It did not provide cover for the State pension. The modified rate of social insurance was a condition of employment for public servants at that time. Accordingly, even if those affected by the marriage bar in the public service had continued in employment, contributions paid at this rate would not have given entitlement to a State pension (contributory) under the social welfare system.

It is not possible to estimate how many women in the private sector faced an equivalent requirement to leave their jobs upon marriage, nor how many of these would then have taken up employment with other employers that had no such policy. At that time equivalents to the current jobseeker's benefit and allowance schemes were available to persons suffering the contingency of unemployment in a manner similar to that which exist today and there were provisions whereby persons not entitled to benefit or assistance could protect their social insurance record via credited contributions.

Information provided to workers at the time clearly notified them with regard to the provision of credits, and persons leaving employment were also advised of the potential to continue making social insurance contributions via the voluntary contributions system. Credits would generally only have been available to persons who were available for and genuinely seeking full-time work.

The homemaker’s scheme was introduced in 1994 to make qualification for State pension contributory (SPC) easier for those who take time out of the workforce for caring duties.

The scheme allows up to 20 years spent caring for children under 12 years of age, or incapacitated people, to be disregarded when a person’s social insurance record is being calculated for pension purposes. The effect of this is to reduce the number of years by which the person’s contributions are divided, thereby increasing their yearly average, making it easier for them to qualify for a maximum rate SPC. However, it is important to note that the homemaker’s scheme will not, of itself, qualify a person for a SPC. The standard qualifying conditions for the SPC must also be satisfied. These require a person to enter insurable employment at least ten years before pension age, pay a minimum of 520 contributions at the correct rate (credited contributions do not satisfy this condition) and achieve a yearly average of at least 10 contributions paid or credited on their record.

For those with insufficient contributions to meet the requirements for a State pension (contributory), the State pension system provides alternative methods of support. If someone has paid little or no PRSI, they may qualify for a means tested State pension (non-contributory), the maximum personal rate for which is €219, which amounts to just over 95% of the maximum rate of the State pension (contributory). Alternatively, if their spouse or civil partner is in receipt of a State pension (contributory), they may instead qualify for an Increase for a Qualified Adult of up to €206.30, which is just under 90% of the maximum personal rate of the State pension (contributory).