The sustainability of pensions into the future is important given the changing demographics, the increased numbers of those over 65, increased longevity and reduced dependency ratio. In addition to this, spending on social protection accounts for nearly 40% of current Government expenditure and in the context of the current fiscal crisis savings have to be found in the social welfare system. Because the State pension is a very valuable benefit it is important to ensure that those qualifying have made a sustained contribution to the social insurance fund over their working lives.
People who leave the workplace for homemaking/caring purposes can, if eligible, avail of the homemakers scheme which helps to provide a higher rate of pension for those who meet the qualifying conditions. The homemaker’s scheme makes qualification for State pension (contributory) (SPC) easier for those who take time out of the workforce for caring duties. The scheme was introduced in, and took effect from, 1994 and allows up to 20 years spent caring for children under 12 years of age or incapacitated adults to be disregarded when a person’s social insurance record is being averaged for pension purposes. The scheme will not, of itself, qualify a person for a pension. The standard qualifying conditions, which require a person to enter insurance ten years before pension age, pay a minimum of 520 contributions at the correct rate and achieve a yearly average of at least 10 contributions on their record from the time they enter insurance until they reach pension age, must also be satisfied.
It is worth noting that the 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 distributive nature of the fund.
Women may, if they don’t qualify for a SPC in their own right, receive either a qualified adult payment or a State pension (non-contributory) if they satisfy a means test. The means test for the qualified adult payment takes account of the means of the qualified adult and not those of their spouse or partner.
A range of additional supports such as the rent supplement scheme, fuel allowance and electricity/gas allowance may also be available if the qualifying conditions are satisfied.
