Dáil Éireann Debate, Wednesday - 1 April 2015
44. Deputy Michael Moynihan asked the Tánaiste and Minister for Social Protection when legislation will be brought forward in relation to the changes to the contributory State pension planned under the national pensions framework; if she will provide clarity on this matter for persons who are currently unsure of their future pension eligibility; and if she will make a statement on the matter. [13509/15]
View answerThe 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. To ensure that the individual can maximise their entitlement to a State pension, all contributions paid over their working life from when they first enter insurable employment until pension age is taken into account when assessing their entitlement and the level of that entitlement.
Since 1961, when contributory pensions were first introduced, the average contributions test has been used in calculating pension entitlement. Work has commenced on changing this to a total contributions approach, where anomalies arising with the current method would not occur. Under the total contributions approach, the number of contributions recorded over a work life will more closely reflect the rate of pension payment received.
It is expected that the total contributions approach to pension qualification will replace the current average contributions test for State pension (contributory) from 2020, although that date is subject to change, as this is a very significant reform with considerable legal, administrative, and technical challenges to be overcome in its implementation. When proposals are agreed, legislation will be brought forward to underpin the necessary changes. It is unlikely that this legislation will be ready in the current year. It is my intention that the changes will be announced well in advance of introduction, to allow those workers affected to factor the new rules into their retirement planning.
Where a person does not qualify for a full contributory pension following these reforms, alternatives such as the State pension (non-contributory) will continue to be available.
