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Insurability Case 4

Question At Issue:

Whether the appellant’s employment during a career break was insurable for all benefits (PRSI Class A) under the Social Welfare Acts.

Background:

Appellant took a career break from his employment in the public service during which he worked in the private sector and paid PRSI contributions at Class A which provided cover for all benefits and pensions. He subsequently made a claim for the state contributory pension but found that his Class A contributions had not been taken into account. He appealed against that decision the outcome of which was that the issue was remitted to the Department of Social and Family Affairs for a formal decision on the appropriate rate of PRSI contributions payable in respect of his career break employment.

Following an investigation by the Department, it was decided by a deciding officer that, as the appellant’s employment in the public service had not terminated, he was still regarded as a permanent and pensionable public servant and, therefore, his career break employment was covered under the subsidiary employment regulations. As such, it was insurable at PRSI Class J under the Social Welfare Acts. Social welfare legislation provides that, where a permanent and pensionable public servant who is ordinarily and mainly dependent for his or her livelihood on that employment takes up other employment, that other employment is treated as subsidiary to his or her main employment and, as such, is insurable at Class J for PRSI purposes. The appellant appealed against that decision and that was the issue before the Appeals Officer.

Oral Hearing:

The appellant attended alone. The deciding officer also attended at the request of the Appeals Officer.

The deciding officer explained the background to and the reasons for his decision. He referred to legal advice sought from the Attorney General’s Office in relation to the employment status of civil servants while on career breaks. That advice had made it clear that a civil servant who pursued a career break continued to be engaged as a civil servant, had not been dismissed nor had resigned and remained subject to civil service regulations which included normal disciplinary sanctions where infringements occurred. It followed, therefore, that the only reasonable interpretation of that advice was that there was no break in the contract of employment of a public servant while on a career break. Consequently, the appellant retained the status of a permanent and pensionable public servant while on his career break. It was open to him to purchase any lost superannuation cover once he returned to the public service. The decision given was in accordance with social welfare legislation which provided that any employment undertaken by the appellant during his career break was treated as subsidiary and was insurable at PRSI Class J.

The appellant then put forward the grounds of his appeal. He rejected the contention that he remained in permanent and pensionable employment while on his career break. For the period of his career break, he had not been issued with the staff magazine, he had not been informed about vacancies or promotional opportunities, he had not been permitted to apply for promotions or transfers, he had not been allowed to continue in his employer’s income continuance plan nor continue as a member of the employer’s group private medical insurance scheme and his career break had constituted a break in his service for annual leave and incremental purposes. There had been no obligation on him to return to his employer during the career break period and he had the right to refuse a request to return if it had been made. He had been issued with a P45 when he had commenced his career break. Without that form, he would have been unable to take up further insurable employment.

He argued that he had taken up his career break employment in order to gain experience and skills in the private sector which he felt would be of benefit to the public service on his return. He contended that it was clear that he had not been in receipt of an income from the public service while he had been on his career break but that it was envisaged that he would have had an income from elsewhere on which he would have been ordinarily and mainly dependent for his livelihood. Consequently, any employment he undertook while on his career break could not have been regarded as subsidiary to his public service employment. He accepted that the relevant legislation provided that the employment of a public servant concurrently with his main employment was subsidiary to that employment but argued that the purpose of that provision was to avoid a situation whereby public servants could undertake, for example, part-time work for the purpose of establishing entitlement to social insurance benefits not normally available to them. He maintained that his career break employment was not subsidiary and, consequently, the relevant legislation did not apply to him.

Consideration of the Appeals Officer:

The Appeals Officer reviewed the facts of the case which were not in dispute between the parties. He considered the relevant legislation which provides that any employment undertaken by a person who is ordinarily and mainly dependent for his livelihood on employment in a permanent and pensionable capacity in the public service is subsidiary to that public service employment and, as a consequence, is insurable at PRSI Class J. In the normal course, both employments will run concurrently and the public service employment will be considered the main employment and the other employment will be treated as subsidiary.

He concluded that the relevant legislation can only render the other employment as subsidiary where it is clear that the person concerned was ordinarily and mainly dependent for his livelihood on the public service employment. He concluded that while the appellant’s public service contract had remained in force during the career break on account of the arrangements in place for his return to work, the appellant must satisfy the test of being ordinarily and mainly dependent for his livelihood on that contract in order for the subsidiary employment provisions to be applied.

It was clear to the Appeals Officer that all elements of the appellant’s public service contract had been suspended for the duration of the career break and that he could not have been said to be ordinarily and mainly dependent on that employment. Consequently, he decided that the career break employment was insurable at PRSI Class A rather than PRSI Class J. 

Outcome

Appeal allowed. As a result of the decision, the Class A PRSI contributions paid in respect of the appellant were reckoned for the purposes of his claim for the state contributory pension.

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