Dáil Éireann Debate, Tuesday - 11 April 2017
39. Deputy John Brady asked the Minister for Social Protection his plans to end inequalities in the State pension payment for women as a result of the 2012 changes and the calculation of contributions; and if he will make a statement on the matter. [18280/17]
View answerWhat plans does the Minister have to end the ongoing discrimination imposed on women in their State pension payments as a direct result of changes made by his party in 2012? What will he do to make the calculation methods for contributions fair for those individuals?
The average pensions paid by my Department to men and women over 66 years of age are within 2% of each other. This is reflected in the consistent poverty figures for people over 65 years of age, which show 2.6% of women and 2.9% of men experience consistent poverty, which, effectively, is parity. In fact, men are slightly more at risk of poverty in old age than women.
The current rate bands applying to the State contributory pension were introduced from September 2012 by the then Minister, Deputy Burton, replacing previous rates introduced in 2000. These more accurately reflect the social insurance contributions history of a person. Alternative payments are available for those with little or no means. It is estimated that to revert to the previous bands would cost at least €60 million in 2018, €70 million in 2019, €80 million in 2020, €90 million in 2021 and so forth - an increase of €10 million each year. The main beneficiaries from such a decision would be better-off pensioners who do not qualify for means-tested pension payments and who did not make sufficient contributions to the Social Insurance Fund during their working years to qualify for a full-rate contributory pension, so such a change would increase inequality. I am informed that 57.8% of those affected by the changes in 2012 are women. However, 54.4% of people over 66 years of age are women, so the gap in this regard between men and women is only 3.4%.
The contributory State pension is an entitlement built up through PRSI contributions, and is not impacted on by the means of the pensioner.
The principle of the contributory State pension is that people will receive a fair return for the contributions they have made to the Social Insurance Fund by paying PRSI during their working life. Generally speaking, those with a stronger attachment to the workforce, who have paid more into the Social Insurance Fund over a sustained period, are paid a higher pension than those with fewer or more intermittent contributions during their working life.
To date, 36,000 older people are in receipt of a lower State pension payment than would have been the case prior to the band changes as a direct result of the changes introduced by the Government, of which the Minister was a part, in 2012. I commend Age Action Ireland on highlighting that in an excellent and very detailed report which it recently launched.
The Minister constantly points to the homemaker's scheme as some sort of saviour for women in ensuring they are not discriminated against for taking a caring role at home. The homemaker's scheme only applies to periods of care from 1994 onwards. The Minister acknowledges women in caring roles after 1994 but anyone who cared for someone before that is totally disregarded. Is that fair in the eyes of the Minister? Is it fair that the pensions system is punishing women for taking time out of the workforce to raise a family?
I did not mention the homemaker's scheme at all.
The Minister does constantly. He mentioned it previously.
Perhaps the person who writes Deputy Brady's scripts might give him option A, B and C and suggest that if the Minister says this he should use option A, for example.
The Minister should do his job and answer the question.
The Minister should be allowed to speak without interruption.
I am not sure which policy office prepares Deputy Brady's scripts - the one in Dublin or the one in Belfast - but he should ask for a few different options so that his supplementary questions might follow on from something I said.
The Minister might start implementing stuff here as opposed to it being imposed on him.
There are different types of pension. There is the State pension, non-contributory, which is means tested and it is based on one's means; and there is the State pension, contributory, which is based on how much one paid into the Social Insurance Fund. It is very similar to occupational pensions that are paid to public servants and to the pension Deputy Brady will get paid for his service as a Deputy. The number of years one works and pays in results in the number of years in which one gets a payment and I think that is fair.
I will not take lectures from the Minister as to who writes my speeches or dictates my policy. My party members dictate my party's policies. I question where the Minister gets his right-wing policies from. The simple fact of the matter is that since 2012, one third of new applicants for the State pension have received smaller pensions than they would have received had they retired prior to 2012. Last December Sinn Féin introduced a motion to address the issue. The Minister might remember that because he and his party opposed it. The motion called for a reversal in the band changes and for the widening gender pension gap to be tackled. It is quite obvious that the Minister does not wish to narrow the pension gap nor to see equality for women. He is quite happy to preside over the current system. His reply to my question alludes to that. Ultimately, the message coming from the Minister today and previously to the 36,000 older people in receipt of a greatly reduced pension is "tough". That is shameful. Perhaps the Minister would address that issue.
I certainly do want to see the gender pension gap reduce and it is reducing. In 2014 the gap was 32%, which is a fall of 5% on two years previously, and the gap is lower than it is in the EU, which is 39%; in the Netherlands it is 40% and in Germany it is 48%. We anticipate that the gap will fall. The best way to ensure the gender pension gap continues to fall is to increase the number of people contributing to an occupational pension or to a State pension. I have proposals to do exactly that. The solution is not the solution proposed by Deputy Brady, which is just to lob another bill on the general taxpayer, to say to those who pay for everything and who pay all the taxes that they must pay some more. That is not the solution. The way contributory and occupational pensions work is that people pay into them and because of that they get a pension return. We need more people starting earlier, paying into their pensions and paying in enough to make sure they get a decent pension. That is how we get good outcomes for people. Suggesting that somehow we can just indefinitely add to the taxpayers' bill every time there is a problem is not good policy and it is not sustainable.
So it is a good outcome for the 36,000 older people.
