John Lahart (Dublin South West, Fianna Fail)
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728. To ask the Minister for Social Protection the options available to persons who have not attained sufficient contributions towards their contributory pensions; the circumstances under which PRSI contributions can be refunded; if a mechanism is in place to provide a person with a pro rata pension based on the number of contributions made; and if she will make a statement on the matter. [32107/17]

Regina Doherty (Meath East, Fine Gael)
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Where a person is aged 66 or over does not satisfy the conditions to qualify for a State pension (contributory), or qualifies for less than the maximum rate, they may instead qualify for one the following:

- The means-tested State pension (non-contributory). The maximum personal rate of this pension is €227, which may be payable if their means are no more than €30 per week. If they have means of up to €252.50, a reduced rate may be payable. A living alone allowance of €9 may also be paid, where applicable. Where a couple live together, they may both receive the €227 rate (i.e. €454 between them) if they satisfy the means test.

- If a spouse receives the State pension (contributory), the other spouse may receive a payment, known as an increase for qualified adult (IQA), which may be up to €213.50 per week.

- If widowed, they may qualify for a widow's contributory pension, which they may claim either based on their spouses or their own social insurance record. The qualifying conditions for this require fewer contributions paid (260) than the State pension (contributory), and the maximum personal rate for those aged 66 or over is €238.30, i.e. the same as the maximum rate of the SPC, with allowances (notably the Living Alone Allowance) payable where applicable.

Where a person qualifies for more than one of the above payments, they are paid the pension that is most advantageous to them.

Refunds of PRSI generally arise when contributions from employers and employees have been paid in error. There are a number of reasons why a person might be paying the wrong PRSI rate, the most common of which is where an employee over 66 continues working and pays PRSI, where there is no requirement to do so.

Another case is contributors, who enter insurable employment, either as employees or self- employed, after they have attained the age of 56. If they have no entitlement to a State Pension (Contributory or Non Contributory) then the pension element of the contributions paid by both employed and self-employed contributors may be refunded.

Since 1961, when contributory pensions were introduced, the average contributions test has been used in calculating the rate of pension entitlement. Entitlement is banded, with the maximum rate payable to those with a yearly average of 48-52 contributions, and the minimum rate payable to those with a yearly average in the range of 10-14 contributions per year.

The National Pensions Framework (2010) proposed that a “Total Contributions Approach” (TCA) should replace the yearly average approach for new pensioners from 2020. The aim of this approach is to make the rate of contributory pension more closely match contributions made by a person. Officials of my Department are currently working on the detailed development of the TCA with a view to making proposals for consideration later in the year. This is a very significant reform with considerable legal, administrative, and technical elements in its implementation. An important element in the final design of the scheme will be the position of people who have gaps in their contribution records for various reasons, and this factor is being considered very carefully in developing this reform.

I hope this clarifies the matter for the Deputy.