Dáil Éireann Debate, Tuesday - 29 January 2013
472. Deputy Bernard J. Durkan asked the Minister for Social Protection the qualification limitations that have taken place in respect of contribution or other requirements for contributory old age pension including that of the self-employed; and if she will make a statement on the matter. [4536/13]
View answerSocial structures in Ireland are changing rapidly and the structures of our social support need to change to accommodate this. Addressing the demographic challenges of more people living longer and the impact on the cost of pensions lies behind the current pension reform measures. It is a fundamental principle of our social insurance system that those qualifying for benefits must satisfy a range of contribution and other conditions. The recent State pension reform measures, outlined below, support the direct link between contributions made and the rate of pension received which underpins State pension policy. Aligning the rate of pension with the contribution made by the person ensures that those who contribute more during a working life benefit more in retirement.
Recent State pension reform measures are as follows:
- As provided for in legislation in 1997, the number of paid contributions required for State pension increased from 260 paid contributions to 520 paid contributions with effect from April 2012.
- As provided for in legislation in 2011, State pension transition will cease from 2014, standardising pension age at 66.
- As provided for in legislation in 2011, State pension age will be increased to 67 in 2021 and 68 in 2028.
- New rate bands for State pension were introduced in September 2012, aligning rate of pension paid with contributions paid. The new rates are available at www.welfare.ie.
- A further planned change in 2020 is a move to a ‘total contributions approach’. This will be adopted to replace the current averaging system. The level of pension paid will be directly proportionate to the number of social insurance contributions made by a person over his or her working life. This will remove the current anomaly whereby some people qualify for higher pension payments even though they have fewer contributions (but a higher average) than others who do not qualify, or qualify for a lower pension, due to the average contributions test. It is also planned to cap the number of credits that an individual can avail of to 10 years. Again, it will more directly reflect the number of contributions.
Reforms to pension provision are necessary if we are to continue to maintain pensions on a sustainable and adequate level. The State pension is a valuable benefit and the conditions are designed to ensure that those qualifying have had a sufficient and on-going attachment to the social insurance system.
