Case Studies » Pensions » State Pension (Contributory) - from 2016 Annual Report (ref: 2016/29)

2016/29 State Pension (Contributory)

Oral hearing

Question at issue: Date of award

Background: The appellant, who attained pension age in 2013, made a claim for State Pension in 2012. She was deemed eligible for pension at a reduced rate but remained in receipt of the higher rate of Increase for a Qualified Adult paid with her husband’s State Pension (Contributory). Subsequently, she applied successfully to have her business partnership with her husband recognised as a joint enterprise under the Commercial Partnership Scheme. As a consequence, outstanding Pay Related Social Insurance (PRSI) contributions at the PRSI Class S rate were deemed to have been payable for the period from 1988 (when social insurance was extended to the self-employed) to the date when she reached pension age. Pension was awarded at the maximum rate, with effect from the date in 2015 when the PRSI liability was discharged. An appeal was made, seeking to have payment backdated to her 66th birthday in 2013, and an oral hearing was requested.

Oral hearing: The appellant was accompanied by a local political representative. The Deciding Officer, who attended at the request of the Appeals Officer, outlined the decision and confirmed that it had been made with reference to Section 110 of the Social Welfare Consolidation Act 2005. This provides that a pension may not be paid until all PRSI contributions at the Class S rate have been returned.

Her local representative sought to point out that the appellant’s PRSI liability arose only after the insurability decision which had resulted in a determination that PRSI contributions were due at the Class S rate for the period at issue. He queried the interpretation of Section 110 and contended that it was a technicality that there was a payment of PRSI outstanding. He asserted that had the correct rate been applied from the outset, there would not have been an issue. He submitted that the appellant was entitled to pension with effect from the date of attaining age 66 years and that arrears of pension were due. In addition, he stated that there was provision in social welfare legislation for backdating claims in certain circumstances and submitted that this should also be examined in the context of the appeal.

Consideration: The Appeals Officer noted that the evidence served to establish that the Department of Social Protection had not known that the appellant was in a business partnership with her husband as this had not been brought to attention until her accountant requested a decision regarding insurability in 2015. He considered that it was open to the appellant to have asserted her status as a self-employed contributor at any time from 1988, when social insurance was extended to the self-employed. He noted that there was no evidence to indicate that the appellant had ever sought to have this matter clarified prior to the request made by her accountant and, had she done so, that the matter could have been resolved well in advance of her 66th birthday. He noted that the Department of Social Protection had initiated an investigation as to her insurability status as soon as it had been requested.

The Appeals Officer noted the legislation outlining the manner in which social insurance contributions are to be assessed for purposes of determining entitlement to State Pension, and the particular provisions which apply in assessing contributions which are made in respect of self-employment. Section 110(2) of the Social Welfare Consolidation Act 2005 provides that where a claim for State Pension is made on or after 6 April 1995, the contribution conditions are not regarded as having been satisfied unless all contributions payable in respect of self-employment have been paid, as follows:

‘a State Pension (Contributory) shall not be payable in respect of any period preceding the date on which all self-employment contributions have been paid’.

On the question of backdating the claim, the Appeals Officer noted that the relevant legislation refers to circumstances in which a person fails to make a claim within the prescribed time. It was noted that in the appellant’s case there had been no delay in making the claim and the Officer was satisfied that the question of backdating did not arise.

The Appeals Officer observed that the provisions of Section 110(2) are very clear and do not allow for discretion in their implementation, providing as they do that pension may not be awarded on any date earlier than that on which contributions due in respect of self-employment are deemed to have been paid.

Outcome: Appeal disallowed.