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Home-makers Scheme

Dáil Éireann Debate, Thursday - 19 June 2014

Thursday, 19 June 2014

Questions (87)

Ruth Coppinger

Question:

87. Deputy Ruth Coppinger asked the Minister for Social Protection if she will re-examine the home-maker's scheme for those who had homemaking responsibilities prior to 1994 in order that those persons are not disadvantaged in getting the State pension compared to those with caring responsibilities after 1994 (details supplied). [26429/14]

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Written answers

The rate of State pension (contributory) a person qualifies for on reaching the age of 66 depends upon, among other conditions, the average number of contributions paid or credited each year, from the time they enter insurable employment.

The homemaker's scheme was introduced in 1994 to make qualification for State pension (contributory) easier for those who take time out of the workforce for caring duties. The scheme allows up to 20 years spent caring for children under 12 years of age or incapacitated people to be disregarded when a person's social insurance record is being averaged for pension purposes.

To be eligible for the homemaker’s scheme, a person must:

- Permanently live in the State (exception may be made where EU regulations apply),

- Be aged under 66,

- Have started insurable employment or self-employment before the age of 56,

- Not work full-time, although for the purposes of this scheme, a person can work and earn less than €38 gross per week,

- Care for a child (under 12) or an incapacitated person on a full-time basis.

It is important to note that the homemaker's scheme will not, of itself, qualify a person for a pension. The standard qualifying conditions must also be satisfied. These 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.

The homemaker's scheme was introduced from 1994, and as with most schemes, this was without retrospective effect. The possibility of backdating was considered in the context of the Green Paper on Pensions. This found that that backdating it to 1953 would cost approximately €160 million in additional spending annually. The amount reduces to €150 million if backdated to 1973/74. However, this remains a very significant additional cost that would have to be met from either cuts in Exchequer spending, or increases in taxation. Consequently, the Government has no plans to backdate this scheme prior to 1994.

Persons who have insufficient contributions to qualify for a full State pension (contributory), may qualify for a means tested State pension (non-contributory). Furthermore, some affected persons may be entitled to a qualified adult increase on their spouse’s/partner’s pension payment. This increase is paid directly to the qualified adult.

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