Written answers

Thursday, 17 December 2015

Department of Social Protection

State Pension (Contributory) Eligibility

Photo of Ciarán LynchCiarán Lynch (Cork South Central, Labour)
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63. To ask the Tánaiste and Minister for Social Protection to consider the apparent anomaly raised by a person (details supplied) in County Cork regarding the State pension (contributory); and if she will make a statement on the matter. [46016/15]

Photo of Joan BurtonJoan 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 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, subject to legislative provisions, 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. For example, one contributor may never require access to Invalidity Pension whereas it may be a crucial support for another. It should also be noted that access to Widow's/Widower's/Surviving Civil Partner's Contributory Pension is available to those who have been married or in a civil partnership only, and that scheme will not benefit someone who has been single all their life.

To qualify for a Widow's or Widower's or Surviving Civil Partner's (Contributory) Pension, either the person claiming or their late spouse or civil partner must have a certain number of PRSI contributions. All the PRSI requirements must be met on one person's record - one may not combine the contributions of either spouses or civil partners. All must have been made before the death of the spouse or civil partner. Virtually all PRSI contributions count towards this pension, including contributions paid by public servants and the self-employed.

The purpose of the pension system is to provide a person with an adequate income. The rate of payment is set with this objective in mind, and the fact that there are a number of ways one can qualify for such a pension does not mean someone may qualify for multiple pensions. There is, therefore, a principle of one person, one payment, which generally 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.

While there may be other arrangements regarding private pensions, those pensions would not generally have the solidarity based provisions common to social welfare pensions, nor the high level of State subsidy which exists for schemes financed by the Social Insurance Fund.

Amending the State pensions system, to allow two pensions be paid to one person, would be a significant change to the system, providing one person with the pension income of two people, and would greatly increase the cost of the scheme. This extra cost would have to be financed from either an increase in the rate of PRSI contributions, an increase in the Exchequer subvention to the scheme, or a reduction in the rate of payments. I have no plans to introduce such a change.

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