Minister Burton publishes the Social Welfare and Pensions Bill 2014

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The Minister for Social Protection, Joan Burton TD, today (Friday, 30th May 2014) published the Social Welfare and Pensions Bill 2014 to give effect to a number of important social welfare and pensions reforms.

In the Bill, Minister Burton is strengthening the residence requirements relating to entitlement to means-assessed social welfare payments and to Child Benefit. Currently, in addition to satisfying the other eligibility criteria specific to these payments, a person must be habitually resident at the date of application for the relevant social welfare payment, meaning the person is residing in Ireland and has a proven close link to the State. This requirement is now being amended so that a person must be habitually resident in the State, not just at the date of the application but also throughout the period that payment is being claimed in order to remain entitled to it.

Separately, the Bill will ensure that, in general, once a family qualifies for Family Income Supplement (FIS), payment of the supplement will continue for 52 weeks regardless of a change in circumstances, such as an increase in weekly earnings. FIS is a weekly tax-free top-up payment for employees on low pay with children. At present, more than 44,000 working families with more than 98,000 children benefit from the scheme. The Department's spend on FIS will increase to more than €280 million this year – a 25% increase since 2012. The Minister said: "FIS is crucially important to working families, and this measure is about ensuring that families in receipt of the supplement have security and peace of mind about the length of their payment."

The Bill also extends the powers of the Department to recover social welfare overpayments. Minister Burton stated: "The vast majority of social welfare customers receive only the payment to which they are entitled. But in cases where overpayments arise whether through fraud or error, it is important that these monies are recovered so that the social welfare budget is managed appropriately and the money is there for those who need it."

Elsewhere, the Bill will extend social insurance cover to spouses/civil partners of a self-employed contributor in cases where that spouse/civil partner is participating in that person's business and earning more than €5,000 a year. This means that the spouse/civil partner will, under the social insurance system, be able to establish entitlement to Maternity Benefit, Widow's, Widower's or Surviving Civil Partner's Contributory Pension and State Pension Contributory in their own right.

Minister Burton stated: "This is a very important reform and essentially means that a group of people who had previously been excluded from contributory State pensions will now be able to qualify over time for pension cover in their own right. This will ensure equality of access to social insurance cover for the self-employed and assisting spouses and civil partners as required under EU law. In the case of women, they will also be able to qualify over time for Maternity Benefit."

In the area of pensions, Minister Burton is amending the Pensions Act to clarify the notification procedures in situations where action is proposed by the Pensions Authority in relation to a scheme.


Note for News Editors

The main provisions of the Bill are:

  • Section 5 clarifies the powers contained in the Social Welfare Consolidation Act 2005 enabling the Minister for Social Protection to make regulations providing for refunds of employer PRSI contributions in the case of certain seafarers employed on board vessels that are registered in a Member State of the EU or European Economic Area and are providing scheduled passenger services between ports within those States.
  • Section 6 provides that where an employer has a debt owing to the Minister in respect of redundancy lump sum payments and that employer qualifies for a refund of PRSI contributions, the debt owing to the Minister can be recovered from the PRSI refund. The Redundancy Payments Act 1967 provides for lump sum payments by employers to their employees upon their dismissal by reason of redundancy. Where an employer does not pay such a lump sum payment to his or her employees who have been made redundant, the Redundancy Payments Act provides that such payments can be made by the Minister for Social Protection to the employee. The Minister can then recover such amounts from the employer.
  • Section 7 provides that increases in Jobseeker's Allowance, Pre-Retirement Allowance, Supplementary Welfare Allowance, Disability Allowance or Farm Assist in respect of the qualified adult of the recipient will not be payable for any period during which that qualified adult is resident, whether temporarily or permanently, outside the State, or in prison or otherwise detained in legal custody.
  • Sections 8 & 9 clarify the rules on entitlement to Family Income Supplement to:
    1. set out the circumstances in which a claimant who is living apart from his/her spouse or civil partner and children can still claim the supplement; and
    2. ensure that, in general, once a family qualifies for Family Income Supplement, payment of the supplement will continue for 52 weeks regardless of a change in circumstances, such as an increase in weekly earnings.
  • Section 10 makes changes in respect of the application of the habitual residence condition for entitlement to certain social welfare payments.
  • Section 14 extends the powers for the recovery of social welfare overpayments to include recovery from certain lump sum payments made by the Minister for Social Protection to that person, i.e. refunds of PRSI contributions, lump sum payments made under the Redundancy Payments Act 1967 and the Protection of Employees (Employers' Insolvency) Act 1984.
  • Section 16 extends social insurance cover to assisting spouses/civil partners of self-employed contributors. The Social Welfare code currently excludes certain relatives, including spouses/civil partners, of a self-employed contributor who are participating in that person's business and performing the same or ancillary tasks from social insurance cover. The Bill provides for the extension of social insurance to these spouses and civil partners where their annual self-employed income exceeds an annual insurability threshold of €5,000. This measure will provide for the transposition of the elements of Directive 2010/41/EU on the application of equal treatment between men and women engaged in self-employment activity, in so far as they relate to ensuring that the spouse or civil partner of a self-employed worker can benefit from social protection in accordance with national law.
  • Section 20 clarifies the detail to be provided by trustees to scheme members in the notification, including the right to appeal to the High Court, in situations when the Pensions Authority issues or proposes to issue a unilateral direction to the trustees of a scheme to restructure a scheme.
  • Section 21 provides for similar clarification in relation to the notification of scheme members in advance of the Pensions Authority making a direction to wind up a defined benefit scheme.
  • The Bill is available to view on and

Self-employed PRSI:

Self-employed people with reckonable annual income of over €5,000 pay a Class S PRSI rate of 4% of all income including unearned income, subject to a minimum annual contribution of €500. The Actuarial Review of the Social Insurance Fund 2010 found that social insurance benefits "offer excellent value for money" for the self-employed. The report stated: "The self-employed achieve better value for money compared to the employed – when the comparison includes both employer and employee contributions in respect of the employed person… Self-employed contributions are charged at the rate of 4% of reckonable income over €5,000 or €253, whichever is the greater. Self-employed contributors who pay the minimum contribution of €253 and build up a sufficient contribution history to qualify for the SPC are getting exceptional value for money. To put this into context individuals paying at the minimum €253 per year over a full working life will receive a pension of €230.30 per week during retirement."

Habitual residence:

The habitual residence condition applies to:

  • Jobseeker's Allowance
  • State Pension (Non-Contributory)
  • Blind Pension
  • Widow's, Widower's or Surviving Civil Partner's (Non-Contributory) Pension
  • Guardian's Payment (Non-Contributory)
  • One-Parent Family Payment
  • Carer's Allowance
  • Disability Allowance
  • Supplementary Welfare Allowance (other than once-off exceptional and urgent needs payments)
  • Child Benefit, and
  • Domiciliary Care Allowance.

Habitual residence is just one condition of these payments. A person must also satisfy other conditions to receive a payment.

Last modified:30/05/2014