Dáil Éireann Debate, Tuesday - 30 January 2018
613. Deputy Willie O'Dea asked the Minister for Employment Affairs and Social Protection if the total contributions approach that is due to come into effect for all pensioners in 2020 will be modelled differently from the one announced for the 2012 pension anomalies; if this will affect those who will be able to avail of the new total contributions approach as a result of the 2012 anomalies; and if she will make a statement on the matter. [4456/18]
Amharc ar fhreagraOn 23 January, the Government agreed to a proposal that will allow pensioners affected by the 2012 changes in rate bands to have their pension entitlement calculated by a new “Total Contributions Approach” (TCA) which will include up to 20 years of a new HomeCaring credit. This approach is expected to significantly benefit many people, particularly women, whose work history includes an extended period of time outside the paid workplace, while raising families or in a caring role. It will make it easier for such pensioners to qualify for a higher rate of the State Pension (contributory). The TCA will ensure that the totality of a person’s social insurance contributions - as opposed to the timing of them - determines a final pension outcome.
Officials in the Department have been working on the introduction of a Total Contributions Approach since 2015. The recent Actuarial Review of the Social Insurance Fund has been used to explore the costs of various options and to inform the design of the Total Contributions Approach.
This Review was recently completed and published, and the costings produced are being considered, with a view to progressing to the next stage, which will include a consultation process. The final structure of the model, which will include the number of years required for a maximum rate of pension, and the treatment of credited contributions and home-making periods, will be submitted to Government later this year, following that consultation process.
Subsequent to this, legislative proposals will be introduced to the Oireachtas.
This is a very significant reform with considerable legal, administrative, and technical components to be put in place prior its implementation.
It is intended that the arrangements in place from 2020 will apply only to new pensioners from that date.
I hope this clarifies the matter for the Deputy.
