Dáil Éireann - Volume 637 - 26 June, 2007
Written Answers. - Pension Provisions.
Deputy John Deasy Deputy John Deasy
Deputy John Deasy asked the Minister for Social and Family Affairs his plans to alter the pension arrangements in place for those who applied for a pension for the self-employed, whereby this was granted on a pro rata basis in order that those who paid five years contributions are not receiving the same payment as those who paid nine years; if he will examine this inequality; and if he will make a statement on the matter. [17387/07]
Deputy Michael Ring Deputy Michael Ring
Deputy Michael Ring asked the Minister for Social and Family Affairs if he will introduce a pension at a reduced rate to those elderly people who contributed PRSI on the expectation of receiving a pension but were denied by reason only of their advanced age; his plans to introduce the recent recommendation by the Human Rights Commission in this regard. [17494/07]
Deputy Martin Cullen Deputy Martin Cullen
Deputy Martin Cullen: I propose to take Questions Nos. 417 and 424 together.
It is a fundamental principle of our social insurance system that those qualifying for benefits must satisfy a range of contribution and other conditions. In the case of contributory pensions this involves commencing payment of contributions 10 years before pension age, payment of a minimum number of contributions at an  appropriate rate and reaching a minimum average annual contribution rate. The State pension (contributory) is a valuable benefit and the conditions are designed to ensure that those qualifying have had a sufficient and ongoing attachment to the social insurance system.
A special pension for the self-employed was introduced in 1999 to enable people who were over age 56 at the time of the introduction of PRSI for the self-employed in 1988, and who could not therefore meet the standard qualifying conditions, to receive a contributory pension. To qualify, a person must have been age 56 or over on 6 April 1988, started paying social insurance contributions as a self-employed person on or after this date and have at least 260 full-rate social insurance contributions paid on a compulsory basis since first starting to pay social insurance contributions as a self-employed person. The personal rate and increases for a qualified adult and a qualified child are paid at 50% of the standard maximum rate.
The arrangements introduced in 1999 are designed to give some recognition under the social welfare system to a group of people who would not otherwise qualify for any payment, contributory or means tested. I consider the arrangements to be a reasonable response to the situation that existed at the time and, accordingly, I have no plans to make any enhancements to this special pension. I might add that similar arrangements were introduced in 2000 to give some additional recognition to people with pre-1953 social insurance.
The case reported on by the Irish Human Rights Commission (IHRC) involves a couple who were over 56 years of age in 1988 when compulsory social insurance for the self-employed was introduced. Accordingly, they were unable to satisfy one of the requirements for a standard pension as they did not commence paying insurance 10 years before pension age. The couple also failed to qualify for a pension under the special arrangements introduced in 1999.
While one of the couple could have qualified had they paid the necessary contributions, because of advanced age the other person would not have been able to contribute the necessary level of contributions before reaching pension age. A refund of part of the social insurance contributions was available to such people from 1996.
Having considered the case, the IHRC has recommended that a reduced benefit should be paid to people who, because of advanced age, could not satisfy the conditions for the special pension introduced in 1999. The recommendations of the IHRC are based on its assessment of the situation under the European Convention on Human Rights, the International Covenant on Civil and Political Rights and the European Code of Social Security.
In relation to the European Code of Social Security, the IHRC places particular emphasis on provisions in relation to the position of people,  who by reason of age when provisions are introduced, cannot satisfy contribution or employment conditions. The Department makes annual reports on compliance with this Code to the Council of Europe, summarising changes to the social welfare system. These reports are then referred to the International Labour Organisation (ILO) Committee of Experts for their examination. The Department’s 1999 report included details of the self-employed provisions which are now the subject of the IHRC investigation. At that time, the ILO Committee confirmed that Ireland met its obligations. Accordingly, as an initial step in its review of the IHRC report, my Department has asked the ILO Committee of Experts for its views on the way in which the IHRC has interpreted the relevant articles. The position will be reviewed in the light of the views received.
Deputy Richard Bruton Deputy Richard Bruton
Deputy Richard Bruton asked the Minister for Social and Family Affairs his views on whether the difference in treatment of pensioners in respect of their right to work at age 65 and at age 66 continues to be justified in view of the desire to encourage continued working beyond age 65; and his further views on reducing the restrictions on insurable employment at age 65. [17447/07]
Deputy Martin Cullen Deputy Martin Cullen
Deputy Martin Cullen: The State pension (transition) was introduced in 1970 when it was known as the retirement pension. It was designed to bridge the gap between the standard social welfare pension age, which at that time was 70 years of age, and retirement at age 65. Because of the purpose for which the scheme was introduced, a key qualifying condition was that a person had to be retired in order to qualify for a payment. Retirement was defined as not engaging in insurable employment, which today means earning less than €38 per week. The social welfare pension age was subsequently reduced in stages until it reached 66 years of age, which means that the retirement condition is now only effective for 1 year.
I consider it important that those who wish to continue in employment after normal retirement age should, as far as is possible, be facilitated and supported. Longer working can play an important role in ensuring that our pensions system is sustainable in the future and it can also be beneficial to the individual. There are additional costs involved in removing the retirement condition but I am keeping the position under review with a view to implementing the change when resources permit.
The retirement condition associated with the state pension (transition) is only one aspect of a much broader agenda which will need to be addressed if we are to create the conditions where people can continue in employment past what we now regard as normal retirement age. As the House is aware, the Government is committed to producing a Green Paper on pensions as part of  the social partnership agreement Towards 2016. The Green Paper will include an examination of all the issues surrounding retirement age, the barriers faced by older workers who wish to remain in employment and the incentives in this regard which can be considered. It will be published when the Government has completed its consideration of the issues raised in it. When the Green Paper has been published there will be a consultation process after which the Government will develop a framework for a long-term pension policy.
Dáil Éireann 637 Written Answers. Pension Provisions.