The State pension is a very valuable benefit and is the bedrock of the Irish pension system.
Therefore, it is important to ensure that those qualifying have made a sustained contribution to the Social Insurance Fund over their working lives. This is particularly important given the challenges in relation to the future sustainability of the State pension, with increased numbers of older people living longer.
When assessing whether an individual is entitled to a State pension, and to ensure that they can maximise such entitlement, all contributions (paid or credited) from when they first enter insurable employment until pension age are taken into account.
The State already assists those with caring roles to qualify for a State pension (contributory). The homemaker’s scheme makes qualification for State pension (contributory) easier for those who take time out of the workforce for caring duties. The scheme, which was introduced in 1994, allows up to 20 years spent caring for children under 12 years of age or incapacitated people to be disregarded when a person’s social insurance record is being averaged for pension purposes.
Given the valuable nature of the State pension (contributory), those who qualify under the homemaker’s scheme still need to fulfil the eligibility requirements for that scheme, and have at least 520 paid contributions. They also need to satisfy a yearly average condition. A yearly average of 48 contributions paid or credited is required for a full rate pension, and reduced rates of payment may be payable for pensioners with lower averages.
However, for those with insufficient contributions to meet the requirements for a State pension (contributory), the overall State pension system provides alternative methods of support. In this instance, these individuals may have access to alternative income supports, depending on their circumstances. They may qualify for a means tested State pension (non-contributory), the maximum personal rate for which is €219. If their spouse or civil partner is in receipt of a State pension (contributory) they may instead qualify for an Increase for a Qualified Adult of up to €206.30. This increase is paid directly to the qualified adult.
A total contributions approach to pension qualification will replace the current average contributions test for State pension (contributory) in 2020, although that date is subject to change. Issues such as equality of outcomes for women and men, including those who spend some years outside the labour market on caring duties, will be considered carefully in the context of that reform.