Dáil Éireann - Volume 507 - 01 July, 1999

Written Answers. - Pension Provisions.

192. Mr. N. Ahern asked the Minister for Social, Community and Family Affairs if he will put in place some special entitlement of bonus for people who have completed 45 or 50 years of paid contributions to the social insurance fund; his views on whether it is appropriate and acceptable that people should revert to old age pension rate after such a fine record; and if he will put in place a once-off payment or a top-up payment for such workers. [17140/99]

Minister for Social, Community and Family Affairs (Mr. D. Ahern): The social insurance system is an important expression of social solidarity both between people generally and the gener[988] ations. The Social Insurance Fund plays a key role in the provision of social protection in Irish society. People, when they are economically active, make contributions to the fund according to their ability to pay and depending on the range of benefits and pensions for which they are covered. These payments fund the pensions of an earlier generation of contributors and also pay benefits to people who are not working due to unemployment or illness. Contributors, accordingly, build up entitlements to various pensions and benefits which are paid to them as of right, without having to undergo a means test.

The old age, contributory, and retirement pensions operate on a pay-as-you-go system with pension benefits calculated on the basis of a formula fixed in advance and dependent on the average number of contributions over a person's working career. As such, the question of a special once-off or top-up payment does not arise.

The Department is currently undertaking a detailed review of the contribution conditions applying to the old age, contributory, and retirement pensions including the possibility of using contributions paid prior to 1953. The issues involved are complex and raise fundamental questions regarding the number of contributions, both paid and credited, that a person has, the PRSI actually paid in respect of their contributions and their overall value. Issues of equity and redistribution within the social insurance system also arise to be addressed. This review will be completed later this year.

In relation to the rate of payment of the old age pension, I would point out that a key priority of this Government's programme is to increase this to £100 by 2002. We are well on the way to achieving this target rate with the £11 total increase over the last two budgets.