Alan Dillon
Question:72. Deputy Alan Dillon asked the Minister for Social Protection to outline the changes to the State contributory pension; and if she will make a statement on the matter. [7876/24]
View answerTuesday, 20 February 2024
Questions (72)
Written answers
A number of State pension reforms were enacted in the Social Welfare (Miscellaneous Provisions) Act 2023 on the 14th December 2023, which represent the biggest ever structural reform of the Irish State Pension system.
Firstly, the Act introduces flexibility to the State Pension (Contributory). State Pension age remains at 66 years. However a person can now choose to defer drawing down their State Pension to any age between 66 and 70 and receive an actuarially based increase in their weekly payment rate if they wish. They can also use the period between 66 and 70 years of age to build up their contribution record for 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. Those who defer claiming their State Pension (contributory) and continue to work, will also have access to certain short-term contingency payments during the period of deferral.
Secondly, the Act introduces an enhanced State Pension provision for people who have been caring for incapacitated dependents for 20 years or more. This will be done by attributing the equivalent of paid contributions to long-term carers to cover gaps in their contribution record. The Long-Term Carer's Contributions will be available to those who provided full time care to incapacitated dependents for 20 years (1,040 weeks) or more.
Finally, the Act introduces a ten-year phased transition from the yearly average method of calculation of State Pension (contributory) to the Total Contributions Approach (TCA) as the sole method of calculation. TCA is a fairer and more transparent method for calculating State Pension (Contributory). The ten-year transitional arrangements are to avoid a ‘cliff edge’ effect. The first year of phasing-out will begin in January 2025.
I hope this clarify the matter for the Deputy.