Dáil Éireann debate -
Thursday, 4 Mar 1999

Vol. 501 No. 5

Written Answers. - Pension Provisions.

Michael Ferris

Question:

14 Mr. Ferris asked the Minister for Social, Community and Family Affairs the steps, if any, taken or envisaged by him to fulfil the commitment made in An Action Programme for the Millennium to provide a mechanism to allow women who take time out for family reasons to continue contributions for pension purposes; and if he will make a statement on the matter. [6449/99]

Minister for Social, Community and Family Affairs (Mr. D. Ahern)

The Government is committed to ensuring the broadest possible contributory pension cover to as many categories as possible, and recognises that women who leave the workforce to undertake family responsibilities in the home may lose out in maintaining their social insurance record.

Special arrangements are already in place to help people who work in the home to qualify for an old age contributory pension. From 6 April 1994, years spent out of the workforce caring either for children up to the age of six, increased to age 12 from 6 April 1995, or incapacitated people may be disregarded in calculating the person's yearly average number of contributions. The 1996 Social Welfare Act provided for an increase in the age of children being cared for from six to 12 years and this improvement was effective from the contribution year 1995-96. A maximum of 20 years may be disregarded.

In addition, new pro rata pensions were also introduced in November 1997 so that people who pay social insurance for a reasonable period of time will qualify for an old age contributory pension. A yearly average of between 15 and 19 contributions gives a pension of 75 per cent of the maximum rate, while an average of between ten and 14 gives a pension of 50 per cent. To qualify a person also needs to have a minimum of 260 paid contributions. This measure is of benefit to many women who have gaps in their PRSI records due to working in the home looking after a child, or caring full time for an elderly or incapacitated person.

I consider that more can be done in this area and, as the first step towards meeting the commitment set out in An Action Programme for the Millennium, I have asked my Department to examine the issue in the context of a general review of the qualifying conditions for old age contributory and retirement pensions. I expect this review to be completed in the first half of this year, and I will consider the matter further at that stage.

The general question of pension provision, both Social Welfare and occupational, also arose for consideration in the context of the National Pensions Policy Initiative.

Arising out of the initiative, the Pensions Board's report, Securing Retirement Income, recommended that secondary pension coverage targets also include specific targets for increased coverage of women in both employed and self-employed areas.

In this context, the report envisaged that the proposed introduction of personal retirement savings accounts, PRSAs, would greatly facilitate the position of women with broken employment records due to childcare and other responsibilities. The working group, chaired by my Department, which was set up to progress the recommendation to increase second pillar coverage generally and which is examining issues relating to PRSAs, is making good progress. The outcome of their deliberations will be reflected in the comprehensive Pensions Bill which I hope to publish later this year or early in 2000.