Ruth Coppinger (Dublin West, Anti-Austerity Alliance)
Link to this: Individually | In context | Oireachtas source

11. To ask the Minister for Social Protection to alter the rules of the State pension (contributory) scheme to recognise J class pay related social insurance payments in certain circumstances (details supplied). [8090/16]

Joan Burton (Dublin West, Labour)
Link to this: Individually | In context | Oireachtas source

The State pension (contributory) is one of the State pension schemes, and its rate of payment is related to contributions made over years into the Social Insurance Fund. As such, those with a stronger attachment to the workforce, who have paid more into that fund, are more likely to be paid under that scheme. There are a number of criteria which must be satisfied in order to qualify for a State pension contributory. These include that the person must be aged 66 or over, and that they have at least 520 paid contributions at class A, E, F, G, H, N or S, i.e., a minimum of 10 years of paid contributions.

People with Class J contributions do not pay any contributions themselves, and their employer will generally make a contribution at a rate of 0.5%, essentially to cover occupational injuries benefit. Class J normally relates to people with reckonable pay of less than €38 per week (from all employments). However, a small number of employees are insurable at Class J, no matter how much they earn, such as employees aged 66 or over or people in subsidiary employment. This does not provide coverage for most contributory benefits, such as the State pension (contributory). If a person who is now liable to pay PRSI Class J was previously eligible for or satisfies the criteria for credits then he/she will receive those credits, and they may be of benefit in calculating the yearly average of that person when they reach pension age. These contributions will not, however, count as paid contributions, of which a contributory pensioner requires a minimum of 520.

The homemaker’s scheme makes qualification for State pension (contributory) easier for those who take time out of the workforce for caring duties. The scheme, which was introduced in 1994, 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 averaged for pension purposes. However, those who qualify under the homemaker’s scheme still need to fulfil the eligibility requirements for the pension, and have paid at least 520 contributions over the course of their working lives.

It should be noted where people do not qualify for a full rate contributory pension as a result of an intermittent PRSI record, the social protection system provides alternative methods of supporting such people in old age. For example, if their spouse has a contributory pension, they may qualify for an Increase for a Qualified Adult amounting up to 90% of a full rate pension, which by default is paid directly to them. Alternatively, they may qualify for a means-tested State Pension (non-contributory), amounting up to 95% of the maximum contributory pension rate.