§ Mr. Cryerasked the Secretary of State for Social Services if he will make a refund or special allowance to all those persons, women aged 55 years and over, and men aged 60 years and over, who do not qualify for the additional year of contributions or who are placed at a disadvantage by the five-year rule; and if he will make a statement.
§ Mr. RossiThe terms of the question are unclear, but I assume that the hon. Member has in mind that the contribution conditions for retirement pension take no account of contributions paid in the year in which minimum pension age is reached, and as far as the full basic retirement pension is concerned, require contributions to have been paid for only about nine-tenths of a contributor's working life. If I am wrong in this assumption, perhaps the hon. Member would write to me.
The national insurance scheme is a system of social insurance in which the income from contributions from those in work between age 16 and minimum pension age goes to pay benefits for those who have retired or are not working for certain other reasons. An individual's contributions are not tailored to match his benefit expectations, but all those with earnings above a certain level—and their employers—share the contribution load. Whilst appearing to be superficially just, to refund money or make a special allowance to people who had already paid enough contributions to qualify for a basic pension or who had paid contributions during the year in which they reached minimum pension age would undermine a principle of the national insurance scheme upon which it was originally founded. It would also involve disproportionate expense in both staff and cash terms.