Dáil Éireann Debate, Wednesday - 10 May 2017
145. Deputy Willie O'Dea asked the Minister for Social Protection the cost of changing the averaging system for the calculation of the State contributory pension back to the system that was in place prior to the changes introduced in 2012; and if he will make a statement on the matter. [22289/17]
Amharc ar fhreagraAs provided for in Budget 2012, from September 2012, new rate bands for State pension (contributory) were introduced. This resulted in one of the bands (in respect of those with a yearly average of 20-47 contributions) being replaced with three bands (in respect of yearly averages of 40-47, 30-39, and 20-29 respectively). These additional bands more accurately reflect the social insurance history of a person and ensure that those who contribute more during a working life are likely to benefit more in retirement than those with lesser contributions.
It is estimated that the cost of reverting to the rate-bands which existed between 2000 and 2012 would be over €60 million in 2018, if introduced from January 2018, and that this annual cost would rise at a rate of some €10 million each year.
I hope this clarifies the matter for the Deputy.
