Dáil Éireann Debate, Wednesday - 20 September 2023
608. Deputy Pádraig O'Sullivan asked the Minister for Social Protection what plans her Department has to deal with the gender pension disparity caused by the minimum 520 PRSI contributions rule; and if she will make a statement on the matter. [39553/23]
View answer609. Deputy Pádraig O'Sullivan asked the Minister for Social Protection how her Department intends to equalise the gender pay gap in terms of the State pension for women who worked in the home; and if she will make a statement on the matter. [39554/23]
View answerI propose to take Questions Nos. 608 and 609 together.
The 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 when working. A person is required to have a minimum of 520 paid reckonable PRSI contributions in order to qualify for the State Pension (Contributory).
The State Pension (Contributory) 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. PRSI Credits, Homemaking Disregards and HomeCaring Periods recognise caring periods of up to 20 years outside of paid employment in the calculation of a payment rate. Since April 2019, State Pension (Contributory) applications are assessed under all possible methods with the most beneficial payment rate paid to the applicant.
Where a person reaches State Pension age and does not satisfy the conditions to qualify for a SPC or qualifies for less than the maximum rate, they may instead qualify for one of the following:
• The means-tested State Pension (Non-Contributory) (SPNC) which is a means-tested payment with a maximum payment of 95% of the SPC; or
• An increase for a qualified adult, amounting up to 90% of a full rate SPC pension where their spouse has a contributory pension; or
• Where their spouse/civil partner is deceased, a widow's/widower's/civil partner's contributory pension, which they may claim either based on their spouse's or their own social insurance record. The qualifying conditions for this require fewer paid contributions (260) than the SPC and the current maximum personal rate for those aged 66 or over is €265.30, i.e., the same as the maximum rate of the SPC, with allowances (e.g., the Living Alone Increase) payable where applicable.
Despite the existing measures within the State Pension system that recognise periods spent caring, some long-term carers of incapacitated dependents may still face barriers in accessing the State Pension (Contributory). They may for example have difficulty establishing the minimum number of 10 years' paid contributions.
Consequently in 2022 I announced a series of landmark reforms to the State Pension system to enhance State Pension provision for people who have been caring for incapacitated dependents for over 20 years. It will do this by attributing the equivalent of paid contributions to long-term carers to cover gaps in their contribution record.
The Long-Term Carer's Contributions (LTCC) will be available to those who provided full time care to incapacitated dependants for 20 years (1040 weeks) or more. The periods of care-giving do not need to be consecutive. I expect to bring the legislation required to introduce the LTCC before the Oireachtas soon, with the scheme being fully implemented from January 2024. This month my Department launched an online system for people to register for LTCC. This will facilitate the expeditious processing of LTCC upon enactment of the legislation.
The reforms will also facilitate the introduction of a system to allow people to choose to defer access to the State Pension (Contributory) up to age 70 and receive a cost neutral actuarial increase in their State Pension payment. This system also provides for a person to continue to pay social insurance contributions past State Pension age to improve their social insurance record for State Pension (Contributory) purposes. These PRSI contributions may enable individuals without a full contribution record (and who have deferred access to the State Pension) to become entitled to the State Pension (Contributory), or increase the pension rate of payment, as a consequence of the additional paid contributions. People will still be able to retire at 66 and draw-down their pension in the same way as they can today. These measures will become effective from January 2024.
Further information in relation to the State Pension changes can be obtained on the Department's website: gov.ie/pension
I hope this clarifies the matter for the Deputy.
