Dáil Éireann Debate, Tuesday - 29 January 2019
579. Deputy Thomas P. Broughan asked the Minister for Employment Affairs and Social Protection if she will give consideration to backdating the arrears payments to pensioners affected by the Budget 2012 rate band changes back to January 2013; the estimated cost of the restoration; and if she will make a statement on the matter. [4324/19]
View answerThe rates of payment, and qualification rules for benefits paid by my Department change from time to time with the approval of Government and the Oireachtas. Generally, these are improvements, at times of inflation and economic growth, but during the economic crisis (and the very significant price deflation at that time), there were reductions in a wide range of payments, which were necessary to manage the very large current budget deficit that the economic turndown created. More recent budgets have seen a number of improvements in the rates of payments across a number of schemes, as the economy has recovered, and the Government has tried to restore and improve rates as this has become possible, while mindful not to repeat the mistakes which caused the economic crisis in the first place.
Such increased rates of payment are not backdated to dates before those changes are announced, and applicants receive their payment based on the correct rules that apply at that time.
In January last year, I announced a new Total Contributions Approach, TCA, to calculating the entitlement of pensioners who reached State pension age from September 2012 (i.e., those born on or after 1 September 1946). In this announcement, I stated that payments would be due from 30 March 2018 in keeping with other budgetary increases that had also been announced. However, the practical steps required to implement these new payments, including development of supporting legislation and IT systems, meant that the first payments would be made in the first quarter of 2019, with arrears paid where appropriate.
My Department is in the process of reviewing those pensioners in receipt of a contributory State Pension below the maximum rate. Payments are expected to be processed in the coming months and will be backdated to 30 March 2018, or their 66th birthday, whichever is later. The cost of this change in 2019, including 2018 arrears, is expected to come to something in the region of €54 million, plus inflows from other payments, such as non-contributory pensioners, who will now qualify for a higher rate contributory pension. The precise figure will depend upon a number of factors, including take-up of HomeCaring periods, and also the inflows from other payments, where a person has no existing SPC claim in the system.
It is more difficult again to give a precise figure for what would be the cost of backdating payments for this change to six years ago, as this would include a number of people who have passed away over the years, and are not, therefore, among current pensioners who are being reviewed. A tentative estimate would suggest the cost to be in the region of €220 million if the new rules were to apply for all who reached State pension age after 1 January 2013.
However, aside from the general principles involved in backdating, if there was to be such a measure introduced for pensioners, there would be calls for similar backdating from many other customers who saw reductions in their payments during the recessionary period. This would make the ultimate cost of such backdating a multiple of its cost in the context of pensions.
I hope this clarifies the position for the Deputy.
