Dáil Éireann Debate, Thursday - 7 December 2023
119. Deputy Alan Dillon asked the Minister for Social Protection if she will consider opening a scheme in the near future for those who are missing PRSI contributions to receive a State pension; and if she will make a statement on the matter. [54061/23]
View answerThere are a number of payments and pensions paid by my Department to people over State Pension Age. One of these is the State Pension (Contributory) (SPC), qualification for which is based on a number of criteria, including a minimum of 520 qualifying social insurance contributions having been paid. For those who have paid the required contributions, these will be used in the calculation of their entitlements.
As the actuarial value of the State Pension is currently estimated at approximately €380,000, I believe 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.
Where a person reaches State Pension age and does not satisfy the conditions to qualify for SPC or qualifies for less than the maximum rate, they may instead qualify for one of the following:
• The State Pension (Non-Contributory) which is a means-tested payment (based on their share of household means) with a maximum payment of 95% of the SPC; or
• An increase for a qualified adult (based on their own means), 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 contributions paid (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 (notably the Living Alone Allowance) payable where applicable.
In September 2022, I announced a series of landmark reforms to the State Pension system in response to the recommendations from the Pensions Commission. This set of measures represents 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. 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, from January 2024, there will be new flexibility for those reaching State Pension age, so that people may choose to defer their pension, work longer, build contributions and receive a higher pension payment, if they wish.
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 has less than the 520 PRSI reckonable paid contributions required to qualify for the contributory state pension, they may opt to continue working and paying PRSI between age 66 and 70 to build up their contributions. Should someone choose to defer their State Pension they may be entitled to receive an actuarially based increase in their weekly payment rate.
In addition, I am introducing measures to enhanced State Pension provision for people who have been caring for incapacitated dependents for 20 years or more. Where a person has not been in a position to satisfy the minimum of 520 paid contributions condition for pension purposes due to the time spent caring, they may be entitled to long-term carer's contributions. Long-term carer's contributions can be awarded to a person who has cared for an incapacitated person for a period of 20 years. These contributions will be treated the same as paid contributions for State Pension (Contributory) entitlement only and can be used to satisfy the minimum 520 contributions condition.
I hope this clarifies the matter for the Deputy.
