Seán Canney (Galway East, Independent)
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517. To ask the Minister for Employment Affairs and Social Protection the utilisation options for the money paid by people in pension contributions when it is established that their contributions do not reach the 520 threshold to qualify for a contributory pension; if this money is invested; if the person who paid for the contribution can access the contributions along with the investment funds accrued; and if he will make a statement on the matter. [15574/25]

Dara Calleary (Mayo, Fianna Fail)
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The social welfare system is primarily a contingency-based system where entitlement to benefits is based on a number of defined contingencies such as sickness, unemployment, old age or bereavement and having sufficient social insurance contributions over a working lifetime.

There are two basic principles which underpin the Irish social insurance system.

Firstly, there is the contributory principle. Under this principle there is a direct link between the PRSI contributions that a person has paid and entitlement to a range of benefits and pensions. Where a person has sufficient PRSI contributions, then benefits and pensions may be paid, 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, all contributions from employees, employers, and the self-employed are paid into the Social Insurance Fund which helps to finance the wide range of contributory social insurance benefits, pensions and other payments. Where the cost of benefits exceeds the amount of contributions available in the Fund, the Exchequer provides a subvention to ensure that benefit obligations are met.

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.

However, a person entering insurable employment after turning age 56 may be entitled to a refund of the pension-related element of their PRSI contributions, due to that person's potential inability to ever build up the minimum number of contributions (520) required for the state pension (contributory). Such a person may apply to my Department’s Refunds Section for this refund. The statutory four year limitation on refunds does not apply in these cases.

I trust this clarifies the matter for the Deputy.