Dáil Éireann Debate, Tuesday - 3 October 2017
578. Deputy Willie Penrose asked the Minister for Employment Affairs and Social Protection her plans to suspend the charges to contribution cards for receipt of a State pension in 2012 until the promised total contribution reward system has been gender proofed and introduced; and if she will make a statement on the matter. [41584/17]
Amharc ar fhreagra579. Deputy Willie Penrose asked the Minister for Employment Affairs and Social Protection the amount of resources required to reverse to charges to the contribution cards for State pension in 2012 in cases in which increasing contributory thresholds impact disproportionately on women; and if she will make a statement on the matter. [41585/17]
Amharc ar fhreagraI propose to take Questions Nos. 578 and 579 together.
Each year, more people are living to pension age and living longer in retirement. As a result of this demographic change, the number of State pension recipients is increasing year on year. This has significant implications for the future costs of State pension provision, and demographic change alone is expected to increase spending on pensions by over €220 million this year, not including the impact of rate increases.
The current rate bands applying to the State pension (contributory) were introduced from September 2012, replacing previous rates introduced in 2000. These rate bands more accurately reflect the social insurance contributions history of a person.
It is estimated that to revert to the previous bands would result in an annual cost at least €60 million in 2018 and this annual cost would increase by an estimated €10 million each following year as a greater number of pensioners qualify under post-2012 rules, i.e., €70 million in 2019, etc. The main beneficiaries from such a decision would be better off pensioners who do not qualify for means-tested pension payments (most of which are at 95% the maximum rate of the contributory pension), and who did not make sufficient contributions into the Social Insurance Fund to qualify for a full rate or 98% rate contributory pension.
While some 60% of these are women, it would be of no benefit to the most vulnerable pensioners, notably widows and those in receipt of non-contributory pensions, a higher percentage of whom are women, and who would face reduced increases in the rate of their payments, if that level of funding was re-allocated to pay for reverting to the rate-bands in place from 2000 to 2012.
While I have no plans to make the changes suggested by the Deputy, the issue of homemakers and gender will be considered very carefully in the context of developing the Total Contributions Approach reform that I am planning.
I hope this clarifies the matter for the Deputy.
