Dáil Éireann Debate, Wednesday - 19 January 2022
917. Deputy Ged Nash asked the Minister for Social Protection her views on an issue (details supplied); if she has plans to address the issue of a system of pension entitlements for persons; and if she will make a statement on the matter. [1218/22]
View answerThe Programme for Government “Our Shared Future” includes a commitment to examine options for a pension solution for carers, most of whom - particularly the carers of incapacitated children – are women. This Government acknowledges the important role that carers play and is fully committed to supporting them in that role.
Subject to the standard qualifying conditions for State Pension (Contributory) being satisfied, the State pension system currently gives significant recognition to those whose work history includes an extended period of time outside the paid workplace, often to raise families or in a full-time caring role, through the award of credits and/or the application of the Homemaker’s Scheme (under the Yearly Average method for payment calculation) and/or the application of HomeCaring Periods (under the Interim Total Contributions Approach (TCA)). Details of these are –
Credits – PRSI Credits are awarded to recipients of Carer’s Allowance (and Carer’s Benefit) where they have an underlying entitlement to credits and to workers who take unpaid Carer’s Leave from work.
Homemaker’s Scheme - The scheme is designed to help homemakers and carers qualify for State Pension (Contributory). It allows periods caring for children or people with a caring need to be disregarded (from 1994) and can have the effect of increasing the Yearly Average.
HomeCaring Periods – This Scheme makes it easier for a home carer to qualify for a higher rate of State Pension (Contributory). HomeCaring Periods may be awarded for each week not already covered by a paid or credited social insurance contribution.
Foster parents are entitled to the benefits of the Homemaker's Scheme or HomeCaring Periods, on the same basis as other homemakers, and will qualify if the carer is in receipt of Child Benefit. If not in receipt of Child Benefit, they can still qualify for either scheme if the caring periods are confirmed by TUSLA (where caring is for a short period of time).
Since April 2019 all new State (Contributory) Pension applications are assessed under all possible rate calculation methods, including the Yearly Average and the Interim TCA, with the most beneficial rate paid to the pensioner. The elements which make up each method are set out in legislation.
If a person does not satisfy the conditionality to qualify for State Pension (Contributory), s/he may qualify for the means-tested State Pension (Non-Contributory), the maximum rate of which is over 95% that of the maximum rate of the State Pension (Contributory). Alternatively, if his/her spouse is a State pensioner with significant household means, his/her most beneficial payment may be an Increase for a Qualified Adult, based on his/her personal means, and amounting to up to 90% of a full contributory pension.
The Pensions Commission was established in November 2020 to examine the sustainability of the State Pension system and the Social Insurance Fund, in fulfilment of a Programme for Government commitment. It was an independent body comprised of knowledgeable and experienced academics, pension experts, members of civil society and representatives of workers and employers. The Commission’s Report has unambiguously established that the current State Pension system is not sustainable into the future and that changes are needed, and has set out a wide range of recommendations in this regard - including the full transition to a TCA model, phasing out of the Yearly Average approach and measures to enhance pension provision for long-term carers (over 20 years).
In the interests both of older people and of future generations of older people, the Government intends to consider the comprehensive, far reaching recommendations in the Commission’s Report very carefully and holistically. In this regard I intend to bring a recommended response and implementation plan to Government for its consideration by the end of March 2022.
I hope this clarifies the matter for the Deputy.
