Dáil Éireann Debate, Tuesday - 18 September 2012
849. Deputy Willie O'Dea asked the Minister for Social Protection the number of persons affected by the changes to the State contributory pension scheme that came into effect on 6 April 2012; and if she will make a statement on the matter. [38914/12]
Amharc ar fhreagraA number of minimum paid contributions are required to qualify for a State pension (contributory). The change introducing an increase in the minimum number of paid contributions was provided for in legislation in 1997. The first part of this measure, which increased the minimum qualifying contributions for State pension contributory from 156 to 260, was implemented by a previous government in 2002. The second part, increasing the minimum number of qualifying contributions from 260 to 520 was introduced in April 2012. Those affected from April 2012 amount to an estimated 1,200 people per annum, who will not now qualify for a State pension (contributory), but may have an entitlement to a means-tested State pension (non-contributory).
These changes reflect the comprehensive coverage of the social insurance system and take into consideration the fact that the State pension is a very valuable benefit. Therefore, it is important to ensure that those qualifying have made a sustained contribution to the Social Insurance Fund over their working lives.
Recent changes to State pension supports the direct link between contributions made and the rate of pension received which underpins State pension policy. This ensures that those who contribute more during a working life benefit more in retirement than those with lesser contributions. This has been the policy of successive governments since the relevant legislation was first enacted in 1997. The sustainability of pensions into the future is also important given the changing demographics, the increased numbers of those over 65 and increased longevity and reduced dependency ratio. There are currently six people of working age for every pensioner and this ratio is expected to decrease to less than two to one by 2050. Therefore, the task of financing increasing pensions will fall to a diminishing share of the population.
As social structures in Ireland are changing rapidly, the structures of our social support need to change to accommodate this and the changes to State pension have been made in the context of changing demographics and the fact that people are living longer and healthier lives.
