Written answers

Wednesday, 21 November 2018

Department of Employment Affairs and Social Protection

Social Insurance

Photo of Jack ChambersJack Chambers (Dublin West, Fianna Fail)
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236. To ask the Minister for Employment Affairs and Social Protection if the case of a person (details supplied) will be examined; and if she will make a statement on the matter. [48442/18]

Photo of Regina DohertyRegina Doherty (Meath East, Fine Gael)
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Credited contributions (credits) are social insurance contributions designed to protect the social insurance entitlement record of insured workers who are not in a position to make PRSI contributions, and are awarded in circumstances such as proven unemployment or illness.  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 at Class A, B, C, D, E, H or P.  In general credits can only be awarded where an individual has had a recent attachment to the workforce, i.e. within the last 2 years.

Separately, the Voluntary Contribution Scheme allows those who are no longer working or who otherwise are not paying PRSI, including carers, to protect their PRSI entitlement to certain social insurance benefits, including state pension.  Under the current rules a person can apply to join the scheme from 1 year to 5 years from the end of the year in which contributions were last paid, as an employee or as a self-employed worker.  Voluntary Contributions (VCs) are designed to facilitate employees and self-employed individuals, who are no longer paying PRSI, to pay contributions directly to the Department on a voluntary basis, to protect their future state pension contributory, widow(er)’s contributory pension and guardian’s contributory pension entitlements.  The scheme is most frequently used by employees who have retired early, or by self-employed individuals who are not required to pay PRSI Class S because their annual income falls below the annual €5,000 liability threshold.  Currently, to become a voluntary contributor an individual must have paid at least 520 weeks of compulsory PRSI from either employment or self-employment prior to application.

The Government intends to introduce a Total Contributions Approach (TCA) to establishing the level of entitlement for all new state pension contributory claims from 2020 onwards (TCA2020). It is intended that this scheme will include provisions for periods of home-caring.  I launched a public consultation on this proposal earlier this year in May, which closed in early September.  The consultation sought input on a range of relevant factors which included the amount of contributions needed for a full rate contributory state pension, the amount of credited contributions a person could avail of, the level of provision of Homecaring periods, and whether there would be a "phase-in period" for the final model.  Following examination and consideration of the submissions to the consultation, my officials will prepare proposals for the design of the new approach for consideration by the Government in due course.  Once the model is implemented, calculation of a person's pension will take into consideration all paid contributions, all credited contributions and all periods of homecaring subject to whatever limits are imposed through the implementing legislation.

I hope this clarifies the matter for the Deputy.

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