Dáil Éireann Debate, Tuesday - 23 May 2023
502. Deputy Bernard J. Durkan asked the Minister for Social Protection if she might examine the extent to which a shortfall in an applicant's contributions has affected their entitlement to the State pension (contributory); if there remains an option of increasing their contributions up to the required level to enable them to qualify; and if she will make a statement on the matter. [25000/23]
View answerThe State Pension (Contributory) is a PRSI-based pension, financed by contributions made by current workers and their employers, and paid to pensioners, at a rate based upon their PRSI record.A person is required to have a minimum of 520 paid reckonable PRSI contributions in order to qualify for the State Pension (Contributory). As the actuarial value of the State Pension is currently estimated at approximately €380,000, it is reasonable to require people claiming a contributory pension to have made at least 10 years of paid contributions over the term of their working life, before qualifying for a payment. The requirement for eligibility criteria in order to qualify for the State Pension (Contributory) was endorsed by the Commission on Pensions.
In September 2022, I announced a series of landmark reforms to the State Pension system. The measures are in response to the Pensions Commission’s recommendations and represent the biggest ever structural reform of the Irish State Pension system.
One of the key measures is the introduction of a flexible pension system in Ireland from January 2024. Under this new system people will still be able to retire at 66 and draw-down their pension in exactly the same way as they can today. In addition, there will be new flexibility so that people can choose to defer their pension, work longer and receive an actuarially based increase in the weekly payment rate.
The flexible State Pension system is about providing people with choice. People will decide for themselves what best suits their needs and circumstances. For example, in the case of a person who reaches age 66 and does not have sufficient contributions to qualify for a full pension, they will now have the option to work for up to 4 years longer to build up additional entitlements. If a person has less than 10 years PRSI reckonable paid contributions, they may be able to use this period to establish entitlement.
Officials in my Department are currently working on the legislation and systems to support the introduction of this change, which will be effective from January 2024.
I hope this clarifies the matter for the Deputy.
