Thursday, 30 May 2019

Questions (1)

Willie O'Dea


1. Deputy Willie O'Dea asked the Minister for Employment Affairs and Social Protection the status of the 2012 pension review; the number of persons who have had their pension entitlements reviewed to date; the number of persons awaiting a review; the number of persons issued with a high rate of pension; the number of persons whose pension has remained unchanged; and if she will make a statement on the matter. [22982/19]

View answer

Oral answers (9 contributions) (Question to Employment)

I tabled this question to receive an update on the situation for post-2012 pensioners. I understand the reviews are proceeding quickly. I record my appreciation for the staff and the hard work they are doing and the courtesy and accessibility they afford to me, at least, whenever I have occasion to contact them.

I thank the Deputy. Since September 2018, my Department has been examining the social insurance records of approximately 90,000 pensioners who were born on or after 1 September 1946 and have an entitlement to receive a reduced rate contributory State pension, based on post-budget 2012 rate band changes.  The payments are being reviewed under the new model, the total contributions approach, TCA, to pension calculation, which includes provision for home caring periods. Wherever possible, the reviews are processed based on information we already have in the Department.  Where there are unexplained gaps in an individual's social insurance record, a written request for further information is issued.

Over 45,000 of these requests for information have been issued to date. The reviews commenced from 13 February 2019, which was the day after I signed the necessary regulations. Those regulations, with the provisions of the Social Welfare, Pensions and Civil Registrations Act 2018, allow the increased payments to be made. Regardless of when a review is conducted, if an increased payment is due, the person's rate of payment is adjusted without delay and arrears are paid, backdated to 30 March 2018 or the person's 66th birthday if it was after that date.  If a person's rate does not increase following the review, he or she will continue to receive the rate of payment he or she was receiving before the review. Some 47,753 reviews, involving more than half of all pensioners identified for review, had been completed by 23 May last. On foot of those reviews, some 23,521 pensioners have received an increase in their rate of weekly pension and 24,232 have remained on their existing rate of payment. Notifications of outcomes will continue to be issued to individuals as soon as their reviews are completed. It may take a number of months to complete the reviews because of the numbers involved and the individual nature of the social insurance records. The work will continue until all identified pensioners have received the results of their reviews.

I acknowledge that the reviews are proceeding apace. On 4 April last, I tabled a question to the Minister for written reply. At that stage, just 13,000 cases had been reviewed and 75% of reviews had resulted in increased pension payments. It appears now that slightly fewer than half of the reviews conducted to date have resulted in increased pension payments. Given that this system was introduced to rectify discrimination against people who were born after a certain date in 1946, as opposed to people who were born before that date, does the Minister think it is acceptable that just half of the people who fall into the former category have benefitted? We proposed a simple reversal of the 2012 situation. This would have cost the same amount and everybody would have benefited.

As I recall it, the legislation that was introduced in this House in October 2018 was accepted without amendment by every Member and party in this House. I took it from the unanimity that existed at the time that Deputies were content with the approach that was being taken. While there are people who have not got an uplift as a result of this approach to making an amount of money available to people through their pensions, I remind the House that these payments are based on people's contribution histories. We cannot give someone a contribution history that he or she does not have. The 20-year home-caring credit we introduced into the total contribution approach in 2012 is probably the most generous home-caring credit across Europe, rightly so because it is deserved. If the perspective the Deputy is coming from is one that advocates a universal pension, I think that is an entirely different conversation for us to have. This is the State contributory pension. This is absolutely the fairest way of working out a person's contributions without using the averaging model. That is the model we employed from the legislation in 2012.

Of course, the Minister is right when she says we did not oppose the legislation. We accepted it on the basis that half a loaf is better than no bread. It was not an ideal solution from our perspective. I proposed a simple reversal of the 2012 changes. When we are getting something, we do not look a gift horse in the mouth. The Government had two options - to reverse the 2012 changes, or to introduce this long and rather complex system to try to compensate people. The option it chose is not working for half, or possibly over half, of the people who are affected. Two pensioners in exactly the same position with the exact same number of contributions can get two very different rates of pension, just because one of them happens to have been born before 1 September 1946 and the other happens to have been born on or after 1 September 1946. This will continue to apply to at least half of the people who are affected, and possibly more than half of them.

There were always winners and losers when pension provisions were changed in the past. When this change in pension formation was being made, I was adamant that there were going to be no losers. The people whose reviews have been completed but who have not received an uplift have certainly not received a decrease. They are continuing to receive the payments they were receiving. A number of options are available to people who have not received an uplift, but who have had a determination. We are by no means finished. As I said, almost 45,000 people have yet to send information to the Department to enable it to make a determination. It is probably unwise of the Deputy to expect that the outcome would be 50:50, as that is not where we would have asserted it from the beginning.

It is gradually declining.

People who have not received an uplift have the option of applying for a review in the first instance. If that review does not stand, they have the option of applying for a non-contributory pension because the contributory pension is not means tested and is based on contributions.

I thank the Minister and the Deputy for adhering to the time constraints.