Dáil Éireann díospóireacht -
Wednesday, 30 Oct 1996

Vol. 470 No. 7

Written Answers. - Social Welfare Code.

Seamus Brennan

Ceist:

213 Mr. S. Brennan asked the Minister for Social Welfare his views on whether a case of alleged inequality in the treatment of women in the home for pension purposes falls within the remit of his Department; his views on whether the operation of the social welfare code discriminates against a woman working full-time in the home for ten years prior to retirement age, who had contributions in her earlier career, but is not entitled to a pension, compared with a woman working outside the home, who qualifies for a full pension or a reduced pension for a lower number of contributions; and if he will make a statement on the matter. [19993/96]

Seamus Brennan

Ceist:

225 Mr. S. Brennan asked the Minister for Social Welfare his views on whether the operation of the social welfare code discriminates against a woman working full-time in the home for ten years prior to retirement age, who had contributions in her earlier career but is not entitled to a pension, compared with a woman working outside the home, who qualifies for a full pension or a reduced pension for a lower number of contributions; and if he will make a statement on the matter. [19994/96]

Minister for Social Welfare (Proinsias De Rossa)

It is proposed to take Questions Nos. 213 and 225 together.

To qualify for an old age contributory pension a person must have entered insurance at least ten years before reaching pension age, have at least 156 contributions paid and have a yearly average of at least 20 contributions, or 24 in the case of a retirement pension, registered since January 1953, when the unified system of social insurance came into effect, or the time they started insurable employment, if later.

I would accept that there are anomalies in the pensions area that need to be addressed. The yearly average condition can give rise to particular problems for people with gaps in their insurance records, including women who give up employment to work in the home and then return to work at a later time. A number of these problems have been addressed by the Department in recent years, including the introduction of the Homemaker's scheme in April 1994, which allows for periods of time spent out of the workforce caring either for children aged up to six years, increased to 12 years from 6 April 1995, or incapacitated people to be ignored or disregarded when calculating a person's pension entitlements.

The matter also arises for consideration in the context of the final report of the National Pensions Board — NPB —"Developing the National Pension System" which recommended a pro-rata pension scheme, which, in its view, would resolve the problems arising from gaps in coverage in a more comprehensive way.

The NPB report recommended,inter alia, a wider range of pro-rata pensions related to the average number of contributions over an insured lifetime, where, for example an average of 45 or over, as against 48 at present would qualify a person for the maximum rate of pension while a minimum 30 per cent of full rate pension would be payable for an average of ten to 14 contributions. They also recommend that the number of paid contributions to qualify for retirement and old age contributory pension be increased from 156 — three years — to 520 contributions — ten years. As such proposals could lead to a reduction in entitlement for future pensioners, when compared with present arrangements, they have to be evaluated very carefully.

The report and its recommendations are being studied within the Department at present with a view to bringing forward proposals in a budgetary context. Any such proposals would also, of course, have to take account of the future financing of pensions generally.