Minister for Social protection statement on the review of the State Pension Eligibility rules for members of the Clergy

The Minister states:

The Department of Social Protection provides State Pension payments through the State Pension (Contributory), which is a contributory payment based on a person's social insurance record and the State Pension (Non-Contributory) which is means-tested social assistance payment. To receive either a contributory or social assistance payment a person must qualify for that payment in their own right.

The State Pension (Contributory) is funded from the Social Insurance Fund through the social insurance contributions paid by workers, employers and the self-employed. There are a number of criteria which must be satisfied to qualify for a State Pension (Contributory). These include that the person must be aged 66 or over, and that they have at least 520 paid social insurance contributions (equivalent to 10 years). The rate of payment they receive reflects the number of social insurance contributions paid (or credited) over a working life.

Clergy and members of religious communities were excluded from the social insurance system on its introduction. In 1974, however, the Social Welfare Act 1974 made provision that ministers of religion and members of religious communities engaged solely on pastoral works for which remuneration was received, could be admitted to the social insurance system on the application of the appropriate representative body or authority. The provisions of the 1974 Act meant that all religious authorities or bodies had, if they so wished, the opportunity to apply for social insurance access for their employed members and, therefore, did not discriminate in any way against or in favour of any particular congregations.

Only the Church of Ireland availed of this provision. The position for other ministers of religion and members of religious communities, including those employed as teachers or nurses and remunerated as such, were not covered by social insurance in the absence of such an application by the appropriate representative body or authority.

In 1986, the Commission on Social Welfare published a range of proposals aimed at developing and enhancing the structure and operation of the social insurance system. The exclusion of clergy and other religious communities from social insurance coverage was examined. In this context, it was not considered appropriate to continue to exclude from the system those who are employed in what might be termed secular employment as employees under a contract of service. The categories involved were clergy and members of religious communities who were mainly employed in schools, hospitals, and other institutions. They came within the social protection system as employees, insurable at the ordinary or modified rate, as appropriate to their circumstances from 1988. The effect of this is that clergy and members of religious communities who are employed in public or private sector employment – i.e., in schools, hospitals and other public/social institutions – are afforded the same level of coverage as other employees in those sectors and generally

insurable at PRSI Class A or D, as appropriate.

Clergy and members of religious communities involved in pastoral care only are generally insured as self-employed workers provided they meet the minimum income threshold. Social insurance contributions (Class S PRSI) were introduced for self-employed people on 6th April 1988. These contributions provide cover for self-employed people for a range of benefits including the State Pension (Contributory). In addition to the qualifying conditions above, to be eligible for the State Pension (Contributory) a person must have paid self-employment contributions in respect of at least one contribution year prior to reaching age 66, and all self-employment contributions payable must have been paid in full.

Where a person is unable to meet the qualifying conditions for a State Pension (Contributory) or is only eligible for a reduced rate of contributory pension, they may alternatively apply for State Pension (Non-Contributory) amounting up to over 96% of the maximum contributory pension rate which is subject to a means-test. To receive the State Pension (Non-Contributory) a person must also be aged 66 or over, satisfy the habitual residence condition and have a valid personal public service number. As with all other social assistance schemes, payments are based on an income need. The means test used plays a critical role in ensuring that the recipient has a verifiable income need and that resources are targeted to those who need them most.

This combination of both the contributory and social assistance State pensions means that no person with a viable income need falls outside these schemes.

Any future changes to State Pension system, including changes to credited contributions or the recognition of contributions outside of the existing criteria, would have to be considered in an overall policy and budgetary context and also in the context of the sustainability of the Social Insurance Fund.