Submission 42
November 2007
Like many other Senior Citizens, I was pleased to see reports of your intention to reform the system in relation to the State Pension as currently operated. Your request that the public forward their suggestions as to how best this be accomplished is also appreciated.
The current method of assessing one’s entitlement to a full Contributory Pension is illogical, inequitable and if contested in the courts would surely, be found - on the basis that it denies equal rights to all - to be unconstitutional. Niall Crowley, where are you? As I see it, there are three basic sets of criteria used to assess one’s right to a full pension.
Group A
Those whose first contribution was paid at the age of 56 and who, on reaching 66 years of age have made an average of 48 contributions per year over that period. This means that such persons are required to have paid a total of only 480 contributions to qualify.
Group B
Under an amendment to the rules made by Proinsias de Rossa, when Minister for Social Welfare, those who commenced PRSI payments in 1979 and who reached age 66 after 5 April 1992 and who had an average of 48 per year over 13 years, giving a total of 646 contributions also qualify.
Group C
Of this group, many are the victims of red tape and because of age are most deserving of immediate changes to current rules. Very many have failed, for reasons not of their making, to meet the strict requirements of either of the above categories. They are required to have an average of 48 contributions per year from their first contribution of January 1953 to the date of their last contribution on their reaching 66 years. As the average is calculated by dividing the total of one’s contributions by the number of years elapsing between their first and last, the number of lapsed years can stretch to 50 and require a total of 2,400 contributions. Equality??????
An added difficulty for many in this group is that they are among those who, when work was not available in the 50s, had to emigrate. By their doing, so they saved the State millions of pounds in dole payments and it has been estimated that Emigrants Remittances added billions to the Irish economy. Those who returned brought back skills which helped in no small way towards the establishment of industry in this country and who by their applying these skills personally, thereby trained their workmates.
Years in exile are also regarded as “Lost Years” according to your Department. Those who remained here on the dole were, in addition, given credits towards their pensions. Why not grant credits in respect of years in exile to those who returned? Again we have a further anomaly. Social Welfare contributions paid to British Social Security are taken into account in some instances, but not others, when assessing one for an Irish pension. Why not make them applicable to all? Any pension which one receives from the UK was earned and paid for through our contributions while working there.
We have some politicians, gifted with bi-location, who emulate Boyle Roche’s Bird by being in Dublin and Brussels simultaneously and who draw two, pay related pensions, for their services to both Parliaments. For many, absence from the classroom over several years while serving in the Oireachtas and/or Brussels does not debar them from also drawing a teachers pay related pension. Though our contributions were pay related – our flat rate pensions are decided by the Minister for Finance of the day. Why are our pensions based on the average number of contributions rather than their total cash value?
Very many in group C above, are victims of the embargo introduced in January 1953, whereby employers were not allowed to deduct the cost of a stamp from those whose salaries exceeded IR£600.00 per annum. This figure was raised to IR£800.00 in December 1959; IR£1,200 in September 1965 and further to IR£1,800 in May 1971. This cap applied until 1974 when PRSI was introduced for all with special lower rates for Oireachtas members and Public Servants. For those caught in the embargo trap - returned emigrants suffer on the double – these are again lost years according to your Department. It is conveniently forgotten by all that during this period we contributed in the form of income tax, in very many cases at a higher rate than others. PRSI in itself adds to the inequality of the system as contributions vary in cash value according to one’s salary. Many of us were unaware that we could have made a voluntary social welfare contribution, discovering this fact only on applying for a pension. We are now told that this was printed on the back of the cards, but as these were held by employers and returned by them to the Department we did not have sight of them.
We have recently seen how an oversight by former Ministers has been corrected by an amendment to the law. Those of us who have tried to have the years of exile or the embargo years be ignored in reckoning our average, (mine is 34), were told the rules could not be altered. If the law can be amended for Ministers, why not for those who pay your salaries through our taxes? I have over 1,300 contributions but because I spent from 1956 to 1963 in the UK and from 1969 to 1974 had a salary exceeding the capped amount I have gaps totaling 11 years in my contributions. My initial pension was cut by IR£6.00 per week and increases since have been cut accordingly. Even though I paid full PRSI from 1974, five years earlier than required by de Rossa’s amendment, because I reached age 66, 36 days prior to 5 April 1992, I was assessed on my contributions from 1953 to 1993 and as a result have been cheated out of more than €3,000 and rising. Money can be found to compensate former Ministers. How about us?
Records in your office will show that my letters to successive Ministers have met with a negative response. One would hope that a precedent having now being set in respect of TD’s that you will see your way to amend current regulations and thereby refund monies due to those who were short changed when being assessed for their pension.
