Friday, August 17, 2018
You are here: Isle of Man > Isle of Man News
Isle of Man News
General News
DHSS protects pensioners of the future 17 September 2007

In a move to protect future pensioners, the Department of Health and Social Security has today confirmed that it will not allow for special contributions to be paid towards entitlement to the Isle of Man Pension Supplement, which had been proposed by the Isle of Man Pensioners Association (IOMPA).

Eddie Teare MHK, Minister for Health and Social Security said,

“The Department is presently unable to agree to any extension of the terms of eligibility for entitlement to the Pension Supplement at this time. Whilst I appreciate the concerns of the Isle of Man Pensioners Association, to agree to their request would be tantamount to taking funds from the next generation. The DHSS is committed to providing the best possible service to the people of the Isle of Man both now and in the future. We must consider the next generation and long term sustainability when making decisions such as this.”

The IOMPA requested the DHSS to consider allowing their members to pay special contributions, specific to the Supplement Scheme, to make up the shortfall between the number of years they had paid into the Manx NI Fund before they reached State pension age and the minimum of 10 years required for entitlement to the Supplement. They had requested that these be levied at the same rate as a class 3 NI contribution, which can be paid by those who are eligible on a voluntary basis, at the weekly rate which was then £7.55. However, the Government Actuary following his latest 5-yearly review of the Manx NI Fund in June 2004 stated,

“The Fund is in a fairly stable position at present and neither needs action to improve the size of the fund nor has any excess that can be used to improve benefits etc”.

The DHSS therefore asked the Actuary to advise what the minimum contribution would need to be to ensure that the extension to the Supplement’s eligibility criteria suggested by IOMPA was self-funding. The Actuary advised that it would need to be at least £20 per week, uprated each year in line with earnings. The IOMPA found this level of contribution unacceptable. The DHSS must also consider the additional cost of introducing, from 2010, the State pension reforms provided for in the UK Pensions Act 2007 (which must be applied to the Island under the terms of the reciprocal agreement on social security with the UK) and the consequential effects they will have on the future cost of providing the Pension Supplement.

Under the reforms, men and women who reach state pension age on or after 6th April 2010 will only need to have 30 qualifying years to be entitled to a full basic state pension (currently men need to have a minimum of 44 qualifying years and women 39 years). It is anticipated that as a result many more pensioners will qualify for a full state pension.

Included in the reforms also, is the re- linking of annual state pension increases to rises in average earnings. This may take effect from as early as 2012, but no later than 2015. As the IOM Supplement is paid at the rate of 50% of basic state pension entitlement, it follows that the cost of providing the Supplement in the future will increase.

More stories >>>  

Other Guides by Maxima Systems Ltd: Disney World