Dáil Éireann Debate, Thursday - 3 May 2018
25. Deputy Brian Stanley asked the Minister for Employment Affairs and Social Protection if the State pension rates will be restored to those who left the workforce due to childcare and are now receiving a lower rate of pensions due to previous changes in regard to PRSI contributions in 2012. [19166/18]
Amharc ar fhreagra29. Deputy Brian Stanley asked the Minister for Employment Affairs and Social Protection the progress that has been made to address the anomalies in the State pension due to the changes introduced in 2012. [19165/18]
Amharc ar fhreagraI propose to take Questions Nos. 25 and 29 together.
A policy to introduce the Total Contributions Approach (TCA) to pensions calculation was adopted by the then Government in the National Pensions Framework in 2010, as was the decision to base the entitlements of all new pensioners on this approach from 2020.
On the 23rd 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 under a total contributions approach, which will include up to 20 years of a new HomeCaring credit.
The TCA will ensure that the totality of a person’s social insurance contributions - as opposed to the timing of them - determines their final pension outcome.
In particular it will benefit people whose work history includes an extended period of time outside the paid workplace, while raising families or in a full-time caring role. Crucially, unlike the proposed Homemaking Credits which was proposed in 2010 as part of the National Pensions Framework, the HomeCaring Credit will apply to periods both before and after 1994, as for most people reaching pension age between 2012 and 2019, such periods, where they had them, occurred before 1994, and provisions restricted to periods after then are of little or no benefit to them.
This approach will make it easier for many post-2012 pensioners affected by the 2012 rate band changes who are currently assessed under the yearly average model, to qualify for a higher rate of the State Pension (contributory). A person who reached pension age after 1st September 2012 and has a 40 year record of paid and credited social insurance contributions, subject to a maximum of 20 years of the new HomeCaring credits, will qualify for a maximum contributory pension where they satisfy the other qualifying conditions for the scheme. Up to 10 years of other credits, for example, awarded when on Jobseekers or Illness Benefit, may also be used, subject to the total credits not exceeding 20 years.
Legislation has to be drafted and enacted to enable implementation of these arrangements and IT solutions in line with this legislation must be developed. Accordingly, it is planned that the reviews will commence before the end of this year, with the first payments being made in the first quarter of 2019.
I hope this clarifies matters for the Deputy.
