Eoghan Murphy
Question:380. Deputy Eoghan Murphy asked the Minister for Social Protection if she will investigate a pension anomaly in respect of a person (details supplied). [2837/14]
View answerTuesday, 21 January 2014
Questions (380)
Written answers
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 and the reform measures introduced to date go somewhat toward that goal. Currently a person's date of entry into insurance is taken as the date used for averaging purposes. To qualify for a state pension a person must:
- have entered insurance before the age of 66;
- have at least 520 paid contributions; and
- satisfy a yearly average (a yearly average of 48 is required for a full rate pension).
An increase for a qualified adult, which is a means tested payment may be made to an individual who does not qualify for a pension in their own right or qualifies for a lower rate of pension due to gaps in insurance or the means tested non-contributory pension may be available to an individual who meets the qualifying criteria.
The yearly average test has been in existence since 1961 when contributory pensions were first introduced. The scheme was designed with a view to ensuring that people could qualify for contributory pensions immediately and to suit a system where social insurance coverage was limited. Under the pension reform programme, there is a plan to adopt a total contributions approach where the number of contributions paid over a work life will closely reflect the rate of payment received. For example, 30 years of contributions (1560) could qualify a person for maximum State pension (contributory). A person would accumulate 1/30th of a pension for each year of contributions up to a maximum of 30/30ths inclusive of a certain number of credits. The introduction of new rate bands in September 2012 moves somewhat closer to this process. It had been planned to introduce this change in 2020 but in the context of changing demographics and longer working, this date may be brought forward.
In relation to the person concerned, she entered social insurance on 6 November 1967. In this case, when determining entitlement to State pension contributory (SPC) the yearly average is calculated from her date of entry into insurance to the last complete tax year before reaching their 66 birthday. This person has a yearly average of 14 which equates to the current rate payable to her. Under the current legislative provision, there is no other way in which to calculate the rate of pension payment.