The State pension is a very valuable benefit and is the bedrock of the Irish pension system. Therefore, it is important to ensure that those qualifying have made a sustained contribution to the Social Insurance Fund over their working lives.
The homemaker’s scheme makes qualification for the State pension (contributory) easier by disregarding time spent out of the workforce for caring duties. The scheme was introduced in and took effect from 1994. Eligibility for the homemaker’s scheme is conditional on firstly meeting the standard qualifying conditions for State pension.
There are no plans to review the effective date for this scheme as backdating the scheme further than 1994 would involve considerable costs. The 2007 Green Paper on Pensions indicated that to back-date the homemaker’s scheme to 1953, the year when the unified system of social insurance was introduced in Ireland, would cost the Exchequer in the region of €160m. Costs in relation to this scheme, under the current rules, are expected to increase in the coming years due to the increase in female employment rates since 1994.
The standardisation of State pension age to 66 is one of the reform measures planned which aims to increase the sustainability of the Irish pension system and this was provided for in the Social Welfare and Pensions Act 2011. The State pension (transition) which applies for one year for persons of age 65 will cease from 1st January 2014 and thereafter, State pension age will increase to 67 in 2021and 68 in 2028. The number of women affected by this change is minimal given that only 0.05% of women came from homemaking to State pension transition.
People who are affected by the upcoming changes may be able to avail of a social welfare payment where there is an income need and details of same are available at www.welfare.ie.
In relation to women and social insurance payments, the recently published Actuarial Review of the Social Insurance Fund confirms that the Fund provides better value to female rather than male contributors. It further confirms that those with lower earnings and those with shorter contribution histories, mostly women, have and will continue to obtain the best value for money from the Fund due to the redistributive nature of the Fund.
