Dáil Éireann Debate, Tuesday - 22 October 2019
630. Deputy Michael Fitzmaurice asked the Minister for Employment Affairs and Social Protection the reason persons on five different tiers of the State pension (contributory) only received a percentage of the €5 increase with some only receiving a €2 increase with regard to the Budget 2019 announcement of a €5 increase across the board for social welfare recipients; and if she will make a statement on the matter. [43477/19]
View answerIn order to qualify for the maximum rate of the State pension (contributory) a person must, amongst other qualifying conditions, achieve a yearly average of at least 48 contributions paid or credited on their social insurance record. Reduced pensions are paid to those with yearly averages as low as 10 contributions. Arrangements are also in place for the payment of pro-rata pensions to those with mixed rate insurance records or contributions from different countries.
Reduced rate or pro-rata pensions are paid at a fixed percentage of the full rate payment, for instance, a person receiving a payment of 75% of the maximum rate receives 75% of any budget increase applied to the full rate pension. In order to ensure that the differential between the various rates is maintained, budget increases are also applied on a pro-rata basis.
It should be noted that applying the full budgetary increase to those with reduced payments would erode the differentials which exist and which are intended to reflect the level of contribution which a person has made to the social insurance fund. It would also mean that those on reduced rate pensions would, on an ongoing basis, benefit disproportionately from budget increases.
I hope this clarifies the matter for the Deputy.
