Tuesday, 26 March 2019

Questions (1247)

Brendan Griffin

Question:

1247. Deputy Brendan Griffin asked the Minister for Employment Affairs and Social Protection her views on a matter regarding persons (details supplied); and if she will make a statement on the matter. [12964/19]

View answer

Written answers (Question to Employment)

In January last year I announced a new Total Contributions Approach (TCA) to calculating the entitlement of pensioners who reached state pension age on or after 1 September 2012 (i.e., those born on or after 1 September 1946) and who have a reduced rate pension entitlement based on post-Budget 2012 rate bands.

People whose pensions were decided prior to 1 September 2012 were not affected by the Budget 2012 rateband changes and rate reductions.  As a consequence, people whose pensions were calculated under the 2000-2012 ratebands, including those born in 1945, were subject to a significantly more generous regime than those who qualified before or afterwards, as a Yearly Average of only 20 contributions per year (out of a maximum of 49) could attract a 98% pension, and even those with yearly averages of 10-19 contributions per year received a significantly higher pension than those who reached pension age after September 2012.  The effect of the Budget 2012 rateband changes, as it impacted upon those new pensioners since September 2012, will be familiar to anyone who followed the debate on this matter over the last 6-7 years.  If pre-September 2012 pensioners were also allowed avail of HomeCaring Credits, their arrangements, as a group, would continue to be significantly more generous than those of post-2012 pensioners.  There would also be a very significant cost which would be expected to be of the order of several hundred millions of euros each year.  This in turn could significantly impact funds for future pension increases with consequential implications for pensioner poverty.

For those with insufficient contributions to meet the requirements for a State pension (contributory), they may qualify for a means-tested State pension (non-contributory), the maximum personal rate for which is €232 (over 95% of the maximum rate of the contributory pension).  This rate of payment does not include additional supports available, including rent allowance, household benefits or fuel allowance.  Alternatively, if their spouse is a State pensioner, their most beneficial payment may be an Increase for a Qualified Adult, based on their personal means, and amounting up to 90% of a full contributory pension.

I hope this clarifies the matter for the Deputy.