Dáil Éireann Debate, Tuesday - 1 May 2018
439. Deputy Willie O'Dea asked the Minister for Employment Affairs and Social Protection the status of her plans to allow post-2012 pension recipients on reduced rates to utilise the total contributions model by 2019; the first and full-year cost of this measure; and if she will make a statement on the matter. [19120/18]
Amharc ar fhreagraA policy to introduce the Total Contributions Approach (TCA) to the State Pension contributory (SPC) calculation was adopted by Government in the National Pensions Framework in 2010, as was the decision to base the entitlements of all new pensioners on this approach from around 2020.
The Government announced in January 2018 that those affected by the 2012 rate band changes will also have the option of availing of a TCA-based pension, if it is to their advantage. The TCA model being made available to them will award a maximum rate pension for those with 40 years contributions (including up to 20 years HomeCaring credits), and pro-rata payments for those with fewer contributions. Up to 10 years ordinary credits (e.g. for Jobseekers or Illness Benefit) may also be used, subject to the total number of HomeCaring and ordinary credits not exceeding 20 years.
Preparations for this change are being advanced by officials in my Department, notably in the areas of legislation, administration, and IT-related work. I expect my officials to begin writing to people affected by the 2012 rate band changes before the end of the year and for the first payments to be made in the 1st Quarter of 2019.
The cost in 2019 of introducing TCA for those who reached state pension age after September 2012 will depend on a number of factors. These include the likely take-up of HomeCaring Credits, particularly among men. Current estimates suggest that the full year cost in respect of 2019 may be in the region of €35 million for people already in receipt of a State pension (contributory). However, this figure does not include expected inflows from other schemes such as State pension (non contributory) and from Increase for Qualified Adult payments, who have not previously made an SPC claim. Additionally, payments made in 2019 will also include arrears payments in respect of 2018 as payments will be effective from 30 March 2018 where applicable. Therefore, the total cost in 2019 will not be evident until next year.
I hope this clarifies the matter for the Deputy.
