Michael Healy-Rae (Kerry, Independent)
Link to this: Individually | In context | Oireachtas source

273. To ask the Minister for Education and Skills the reason that teachers who returned to employment after 1995 paying class A PRSI are facing different pension arrangements (details supplied); and if she will make a statement on the matter. [17206/22]

Norma Foley (Kerry, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

In 1995, the full rate of PRSI (Class A1) was extended to all new employees of those categories of public sector employees who previously paid the modified D1 Class. It was also applied to those returning to the sector following a break in employment.

Those paying Class A1 have their pension benefits integrated with their Social Welfare entitlements. Co-ordination is a common feature of pension schemes and is provided for in the rules of the pension scheme which in general are set out in statute. Where employees pay full rate PRSI (Class A1), a reduced pension contribution is paid and the amount of occupational pension is reduced accordingly on the basis that the reduction is balanced out by the Old Age Contributory Pension from the Department of Social Protection

A supplementary pension is an additional amount of pension that may be payable to a retiree whose occupational pension is co-ordinated with the Old Age Contributory Pension. It is payable to retirees in accordance with the terms of the teachers’ pension schemes. Supplementary Pension is equal to the difference between the full occupational pension (that is, the pension which would be payable if co-ordination had not applied), and the combined total of: (i) the actual occupational pension payable and (ii) the personal rate of Social Welfare benefits payable.

In other words, it is paid in circumstances where the combined pensions (i.e. occupational and Social Welfare benefit) are less than the pension the person would receive if the occupational pension was calculated on a non-co-ordinated basis.

It may also be payable when a teacher who is unemployed, following retirement and who through no fault of their own fails to qualify for any Social Welfare entitlement; it represents the difference between the total of the pensions actually received by the person and the pension that would be payable if the occupational pension was not co-ordinated with the Old Age Pension. As the state pension may become payable at 66 years and teachers can retire significantly earlier than this, these teachers can apply for the supplementary pension to be paid in the period between retiring and becoming eligible for the state pension.