Thursday, 30 May 2019

Questions (13)

John Curran

Question:

13. Deputy John Curran asked the Minister for Employment Affairs and Social Protection to outline the progress being made and the associated timeframe regarding the introduction of a total contribution pension scheme; and if she will make a statement on the matter. [23012/19]

View answer

Oral answers (6 contributions) (Question to Employment)

Will the Minister give the House an update on the new total contribution pension scheme, the work being done on the scheme and the associated timeframe? What further consultation will take place before the scheme is implemented?

The introduction of a total contributions approach to establishing the level of entitlement for all new State pension contributory claims was signalled by the then Government in the national pensions framework in 2010. At that time, it set a target date of 2020 for the implementation of a total contributions approach, TCA. More recently, the Roadmap for Pensions Reform 2018-23 targeted implementation of the TCA from quarter 3 of 2020. This is subject to the necessary legislation passing both Houses and being enacted as well as supporting structures being put in place.

The consultation is an important part of the development of the new design. With that in mind, I launched a public consultation on the design of the TCA on 28 May 2018 to which a wide variety of stakeholder groups were invited. A number of workshops were also held on the day to elicit views and feedback. Shortly afterwards, all Oireachtas Members were invited to a detailed briefing by my officials. The consultation was open for more than three months and the Department received almost 300 responses from individuals and organisations. Those submissions outlined the individual views of respondents on the issues of most interest to them. Having carefully examined the outputs of the consultation process, we are now designing the scheme and I intend to bring a proposal to Cabinet shortly with the design for approval, please God. When and if the Government approves the approach, I will publish it and we will publish the legislation that will be required to bring in this reform.

As we are at the end of quarter 2 of 2019, it is an ambitious programme to start implementation in quarter 3 of 2020, especially in the light of the fact that the scheme requires underpinning by legislation. There is an amount of work to be done.

The Minister is right that there was extensive consultation but many people in the House do not know the outcome of that consultation in terms of policy formulation. I hope we get an opportunity to discuss the policy issue before the legislation appears. There should be a fairly substantial and detailed debate either in a committee or in the House rather than beginning with simply seeing the heads of the Bill. Policy issues of concern arise. I will mention two of them at this stage. One relates to 2010 when the idea was first mooted. There was a view at the time that the reckonable period would be 30 years. In more recent times, because of the interim arrangements from 2012, that has changed to 40 years. There needs to be a debate on the matter.

The other significant change is the minimum number of contributions required to qualify has increased from 260 to 520. These questions need to be discussed as policy issues before the legislation is produced.

The difficulty is Deputy Curran is asking me to give Deputies the policy before the Government has decided to give me the green light to proceed with the policy. I have to be honest and tell him that I will not be in a position to do what he is asking. However, I will certainly be in a position to give Deputies the heads of the Bill on the day they are published. At that point, I would very much value a conversation not only internally among the members of the Oireachtas joint committee but by bringing in the stakeholders so that Deputies can hear their views and provide feedback. I do not expect that the Deputy will be disappointed.

I appreciate there is a process and the Minister has to go to the Cabinet. I remind her that this is a substantial policy issue. We have a minority Government, which will require cross-party support to work this out. We are all looking to the long term and to the future. The policy issues I have identified are only some of the issues that we will need to resolve and build consensus on. I appreciate the process the Minister has to go through, including the need to bring a memorandum to the Government and obtain Government approval. However, before legislation is brought to the House, much detailed discussion is required to address those issues. I thank the Minister for her commitment to do so.

The heads of a Bill will go through rigorous pre-legislative scrutiny. As such, the legislation may be changed from the original offering. There are many rounds involved in getting legislation passed. Sometimes legislation does not end up looking like it did originally. Deputies will have ample input and I will value that input to get this over the line. That is what we want to do.