Danny Healy-Rae
Question:613. Deputy Danny Healy-Rae asked the Minister for Social Protection if she will give consideration to an issue (details supplied); and if she will make a statement on the matter. [39620/23]
View answerWednesday, 20 September 2023
Questions (613)
Written answers
One of the landmark reforms to the State Pension system that I announced last September is a ten-year phased transition to the Total Contributions Approach and the abolition of the Yearly Average method, as recommended by the independent Pensions Commission following its in-depth analysis of the State pension system.
During a transition period, individual pension rates will be based on the best of the Total Contributions Approach, or a rate based on a mix of the Yearly Average and Total Contributions Approaches, with the proportion accounted for by Yearly Average reducing from 90% to zero over 10 years and the proportion accounted for by the Total Contributions Approach increasing commensurately.
This fairer system, which removes existing anomalies with the Yearly Averaging system, will calculate pension payments based on the number of social insurance contributions made by a person over his or her working life, with significant pension credits granted to people who have taken time out of the workplace for caring responsibilities.
Officials in my Department are currently working on the legislation and systems to support the introduction of the ten-year phased transition to the Total Contributions Approach and the abolition of the Yearly Average method, which will begin from 1 January 2025.
I hope this clarifies the matter for the Deputy.