Dáil Éireann Debate, Tuesday - 22 May 2018
581. Deputy John Brady asked the Minister for Employment Affairs and Social Protection the status of plans for the early introduction of the total contributions approach for persons in receipt of a reduced State pension payment due to the 2012 pension changes; and if she will make a statement on the matter. [22601/18]
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 pensioners assessed under the yearly average model, 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.
Under the new arrangements a person who reached pension age after 1 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. Crucially, unlike the existing Homemakers disregard system, periods of home-caring before that scheme was introduced in 1994 may be recognised under the new scheme.
Up to 10 years of other credits, for example when unemployed or ill, may also be used, subject to the total number of credits not exceeding 20 years. So, for example, a person might receive a maximum pension based on 20 years paid PRSI contributions, 5 years jobseeker credits, and 15 years HomeCaring Credits, over a 50 year period.
The new TCA for pensioners assessed under the 2012 rate band changes, comes into effect from 30 March 2018. Pensioners do not need to contact the Department at this juncture. Instead, the Department will invite over 40,000 pensioners, who were assessed under the current rate bands in place since 2012, to have their pensions recalculated under TCA to determine if they qualify for a higher rate of entitlement.
Legislation is currently being prepared to enact these changes. Following the passing of this legislation, the Department expects to send out these invitations from Quarter 4 of 2018 and to begin payments, including arrears for any period from 30 March 2018, from Quarter 1 of 2019.
I hope this clarifies the matter for the Deputy.
