Dáil Éireann Debate, Wednesday - 29 May 2013
55. Deputy Thomas P. Broughan asked the Minister for Social Protection her views on the apparent disproportionate impact on women following changes to eligibility criteria for pensions, particularly the increase in the age limits and the increase in the number of reckonable contributions required to qualify for a State contributory pension; and if she will make a statement on the matter. [25704/13]
Amharc ar fhreagraAs the Deputy will be aware, there are a number of planned State pension reform measures underway and the standardisation of State Pension age at 66 in 2014 is one of the changes, together with changes to rate bands for State pension and the increase to 520 paid contributions.
The State pension is a very valuable asset and therefore it is important that those who avail of it have made a sustained contribution to the Social Insurance Fund, from which State pension is funded, over a working life. Recent changes to State pension supports the direct link between contributions made and the rate of pension received which underpins State pension policy. Aligning the rate of pension with the contribution made ensures that those who contribute more during a working life benefit more in retirement. It also ensures greater sustainability of the State pensions system which is essential in the light of demographic changes. This is clear from the figures which indicate the current ratio of workers to pensioners will change from 6:1 at present to 1:2 by 2060.
The homemaker scheme makes qualification for the State pension (contributory) easier for those who take time out of the workforce for caring duties. The scheme was introduced in and took effect from 1994. The scheme allows up to 20 years spent caring for children under 12 years of age or incapacitated adults to be disregarded when a person’s social insurance record is being averaged for pension purposes. This can be beneficial for women who have taken time out of the workforce for caring purposes. The homemaker disregard will not, of itself, qualify a person for a pension. The standard qualifying conditions must also be satisfied.
Female employment rates have increased significantly since 1994, from c. 40% in 1994 to 60% in 2008. It has fallen back since to 55% but many of the unemployed will be getting credits. Ultimately, while difficult to quantify, this will ensure that additional women will qualify for a pension in their own right. The Actuarial Review of the Social Insurance Fund published in September 2012 confirms that the Fund provides better value to female rather than male contributors. The Review shows that those with lower earnings and those with shorter contribution histories, mostly women, have and will continue to obtain the best value for money from the Fund due to the redistributive nature of the Fund.
The Deputy may also wish to note that a review was undertaken in the Department in order to establish the prior position of those reaching State pension age and the review showed that only 0.05% of people come directly from homemaking on to State pension transition. It should be noted that women who do not qualify for a full rate pension may, if their spouse is in receipt of a State pension contributory, receive a qualified adult payment at a higher rate where they satisfy a means test. A State pension non-contributory pension, which is a means tested payment, may also be payable. Time taken out of the workforce for homemaking and caring duties will continue to be protected by the current homemaker’s disregard.
