Meagher v Minister for Social Protection

JurisdictionIreland
JudgeMr. Justice William McKechnie
Judgment Date29 January 2015
Neutral Citation[2015] IESC 4
CourtSupreme Court
Docket Number[S.C. No. 91 of 2014],[091/2014]
Date29 January 2015

IN THE MATTER OF THE SOCIAL WELFARE CONSOLIDATION ACT 2005

BETWEEN
PHILIP MEAGHER
APPELLANT
AND
MINISTER FOR SOCIAL PROTECTION
RESPONDENT

[2015] IESC 4

Denham C.J., McKechnie J., Dunne J.

[091/2014]

THE SUPREME COURT

Social welfare – Pensions – Contributions – Whether appellant had made sufficient contributions to be entitled to pension – S 21(1)(d) Social Welfare Consolidation Act 2005

Facts: The appellant sought to be granted a state contributory pension. This claim had been refused by the respondent, on the ground that the appellant had not made sufficient contributions through social insurance to justify the grant of a pension. The appellant sought to appeal to the High Court the refusal of an Appeals Officer refusing his claim, and now sought to appeal further to the Supreme Court.

McKechnie J, the other Justices concurring, stated that the appeal turned on the interpretation of s 21(1)(d) of the Social Welfare Consolidation Act 2005. Having considered the principles applicable to statutory interpretation, the Court stated that whilst the correct interpretation of the provision resulted in the appellant"s claim failing, the matter was not satisfactory. The provision could not be struck down for absurdity, regardless of the fact it was impossible for the appellant to qualify. The appeal would therefore be dismissed, notwithstanding the Court"s concerns. People (Attorney General) v. Kennedy [1946] IR 517 applied.

Mr. Justice William McKechnie
JUDGMENT of Mr. Justice William McKechnie delivered on the 29th day of January 2015.
1

Since 1999, indeed earlier, Mr. Meagher has been seeking a state contributory pension: on some occasions a full pension but in the instant case a half pension. To be successful he must demonstrate that he has made social insurance qualifying contributions (PRSI) for a period of 260 contribution weeks. He submits that on a proper interpretation of s. 21(1)(d) of the Social Welfare Consolidation Act 2005 ('the 2005 Act') he can so establish. The Minister in charge ('the Minister'), the respondent to this appeal, denies that this provision can be given such a meaning. Accordingly neither on that or on any other basis is he entitled to the pension as claimed.

2

The detail and history of his efforts to obtain a state pension are set out later in this judgment, (para. 13 infra), it is, however, unfortunate to note that a number of rejections were erroneously based. For example, he was incorrectly informed that to meet the 'age' requirement he would have had to be born between 6 th April, 1927 and 6 th April, 1932. The correct period had a start date of one year earlier.

3

In any event in April, 2011 the most recent application was made. It was refused by a Deciding Officer in May, 2011 and on appeal, by an Appeals Officer, whose decision was notified to Mr. Meagher by letter dated 23nd th April, 2012. Phrased rather curiously, as being a 'note on the reasons', rather than simply 'the reasons for', his decision, the letter fails to expressly address a central argument on this appeal, but in fairness it is not altogether clear if such was advanced at the time. The Chief Appeals Officer was asked to revisit the decision, but she declined to so do. Accordingly, an application was made to the High Court challenging the validity of the determination by the Appeals Officer.

4

This procedural process of appeal to the High Court is provided for by s. 327 of the 2005 Act. In effect, it is a statutory appeal on a point of law. No point has been taken in either court as to the scope or parameters of such appeal. Therefore, issues which have frequently been aired in this respect, do not arise for consideration. Likewise, this appeal proceeded in this Court in exactly the same way as it had been argued in the High Court.

Background to PRSI:

5

Prior to 1979 the system in place involving social insurance was that employers would literally 'stamp', their employee"s social insurance cards every week, on a flat rate basis, regardless of income. The card would then be 'brought' to a local social welfare office in order to claim social welfare benefit, if required. In that year a pay related system was introduced, hence the birth of PRSI. This however did not affect the continuing operation of the scheme on the basis of weekly contributions, even though there was no national uniformity within the workplace, regarding matters such as hours or weeks worked, when employees were paid, whether weekly, fortnightly, monthly or otherwise or how much they earned, etc.

6

For the first time, the self employed were obliged to pay PRSI as and from the 6 th April, 1988. This presented considerable challenges to the existing system as even greater variation existed within this group, such as background, working conditions, rates, method and frequency of pay, the number of weeks or even hours worked, the nature of employment such as part time, full time, seasonality, etc. It was therefore necessary to devise a method so that this group could be 'grafted' on to the basic system, as it then existed and as it would continue.

7

To that end various legislative measures both primary and secondary were enacted and passed. Fortunately for the most part one can avoid any historical analysis of the situation as it unfolded in the early years of its operation. For our purpose, the 2005 Act and certain Regulations adopted or applied thereunder, will be sufficient. Some reference will also be made to an important amendment introduced by the Social Welfare Act 1999.

8

At present all employees pay PRSI as do all self employed persons (with some exceptions which are not relevant), between the ages of 16 and 66 who earn more than €5,000 per year. The sums so paid fall into different categories, which are known as, classes or rates of contribution. These classes are largely determined by the nature of one"s employment and the salary received or earned. There are presently about 10 different classes with some of these being further subdivided. Largely most, but not all employees, are in Class A and therefore make what are called 'Class A' contributions. All self employed persons make 'Class S' contributions, which presently is calculated at 4% of reckonable income or emolument or €253, whichever is the greater. Many people fall into both categories and are therefore regarded as concurrent contributors. The contributions so made, which by law are compulsory, are paid into a social insurance fund which has a current account, operated by the Minister and an investment account operated by the Minister for Finance. This fund provides for a range of social insurance benefits and pensions including the State Pension Contributory (sometimes referred to as 'SPC'). The benefits available to an individual will for the most part be determined by what category or class he or she is in.

9

In this case the benefit in issue, as stated, is half a state pension contributory: therefore, only those provisions of the relevant Acts which are material to this claim require consideration.

10

In its original form the contribution conditions for an SPC, included a requirement that an applicant should have entered into insurance before attaining the age of 56. Evidently, it soon became apparent that a considerable number of self-employed persons had been over 56 on the 6 th April, 1988, and therefore were ineligible for any pension on age related grounds. That led to an amendment being passed in the Social Welfare Act of 1999 (s. 21): the result being that for those like Mr. Meagher, the entry age was raised to 62 but the number of weekly contributions was also raised from 156 to 260. This amendment and the other relevant provisions are now to be found in s. 109 of the 2005 Act and, in particular, s. 109(1), (3)(e), (18) and (19) and (20).

Some Personal Details:

11

Before referring to these provisions, however, it is essential to outline certain critical dates in the context of the appellant"s work history. It will also be helpful to an understanding of the issues, the argument and the decision, to indicate what is meant by a number of terms which have a significant bearing for the outcome of this appeal.

12

The appellant"s principal career was that of a self-employed solicitor: from 1980 to 1996 he combined this role with the position of Coroner for County Laois. Having been born on 4 th July, 1926, one can obviously deduce what age he was on some important dates which feature prominently in this case:

· As of 6 th April, 1988: he was over 61 but under 62 years of age.

· As of 4 th July, 1992, he was 66 years of age.

· As of 4 th July, 1996, he was 70 years of age.

The significance of 1988, as stated, is that the PRSI system was extended to the self-employed: that of 1992 is when he became of pensionable age and, therefore, was no longer within the framework of the social insurance scheme and of 1996, when he retired fully from both of his working positions. He therefore paid PRSI as a self-employed person, from 6 th April, 1988, to 4 th July, 1992, and as an employed person from 1991 until reaching pensionable age. In respect of the Coroner"s position, he was insurable as a Class M member before 1991, but this did not count for pension purpose.

Background to the Appeal:

13

The following steps have been taken by Mr. Meagher in seeking a pension:-

(i) In 1997 he made his first claim for a contributory state pension:

this was rejected on the basis that he was over 56 as of April, 1998 and, therefore, was not eligible. An appeal was also disallowed.

(ii) On some date thereafter, a further application was also unsuccessful as he did not meet the age/entry criteria set out in s. 109(3)(e) of the 2005 Act; in the decision however he was erroneously told that such applied only to those...

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