Written Answers. - Pension Provisions.
Deirdre Clune
Ceist:
282
Ms Clune
asked the
Minister for Social, Community and Family Affairs
the provision, if any, made for the pension contributions of those who avail of the homemakers scheme during their years out of employment; and if he will make a statement on the matter.
[20638/99]
The Government recognises that women who leave the workforce to undertake family responsibilities in the home face difficulties in maintaining their social insurance record and has given a commitment under An Action Programme for the Millennium "to provide the mechanism to allow women, who take time out for family reasons, to continue contributions for pension purposes".
Certain measures have already been introduced to address this issue. Special arrangements are in place to help people who work in the home to qualify for an old age, contributory, pension. From 6 April 1994 years spent out of the workforce caring either for children up to the age of six, increased to age 12 from 6 April 1995, or incapacitated people may be disregarded in calculating the person's yearly average number of contributions for old age, contributory, pension purposes. A maximum of 20 years may be disregarded in this way.
Provision is also made for the award of credited contributions in the year in which a person commences or ceases to be a homemaker. In addition, earnings of up to £30 per week where a person is engaged in part-time employment outside the home are also permitted. It is estimated that up to 250,000 people could ultimately benefit under the above arrangements.
I would also point out that in November 1997 I introduced newpro rata pensions so that people who pay social insurance for a reasonable period of time will qualify for an old age, contributory, pension. A yearly average of between 15 and 19 contributions gives a pension of 75 per cent of the maximum rate, while an average of between ten and 14 gives a pension of 50 per cent. To qualify a person also needs to have a minimum of 260 paid contributions. This measure is of benefit to many women who have gaps in their PRSI records due to working in the home looking after a child, or caring full time for an elderly or incapacitated person.
In line with its stated commitment, the Government accepts that more work needs to be done in this area. My Department is now considering the issue on a threefold basis.
First, the issue is being examined in the context of the general review of the qualifying conditions for the old age, contributory, and retirement pensions which, it is hoped, will be completed shortly. This review will consider the present disregard arrangements and alternatives such as the award of credited contributions and the question of retrospection. Second, an in-depth examination by the Department of the general provisions of the homemakers scheme will also get under way later this year.
However, I should point out that any change to the present arrangements – particularly in the area of retrospection – would have significant cost implications and would have to be considered in the overall budgetary context.
Finally, the issue of supplementary pension provision, is being considered by the Department in the context of the pensions board report on the national pensions policy initiative, NPPI. In their report –"Securing Retirement Income"– the Pensions Board recommended that occupational pension coverage targets also include specific targets for increased coverage of women in both employed and self-employed areas.
The board considered that the proposed introduction of personal retirement savings accounts, PRSAs, would greatly facilitate the position of women with broken employment records due to childcare and other responsibilities. The working group, chaired by my Department, which was set up to examine issues relating to the introduction of PRSAs, is making good progress. The outcome of the group's deliberations will be reflected in the comprehensive pensions Bill which I will publish next year.
