As a general policy, the Government intends to introduce a Total Contributions Approach (TCA) to establishing level of entitlement for all new state pension contributory claims from 2020 onwards. This is currently the subject of a public consultation which stays open until the 3rd of September.
Separately, I announced on 23rd January an interim TCA for those affected by the 2012 rate-band changes. Under this approach, a person who reached pension age after 1 September 2012 (i.e. who is among those affected by the new ratebands introduced from that date) and who has a 40 year record of paid and credited social insurance contributions, subject to a maximum of 20 years of credits, will qualify for a maximum contributory pension where they satisfy the other qualifying conditions for the scheme.
Up to 20 years of HomeCaring credits, and / or 10 years of other qualifying credits, for example when unemployed or ill, may be used, subject to the total number of credits not exceeding 20 years. 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). This interim 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.
Legislation has to be drafted and enacted to enable implementation of these arrangements. Following this, IT solutions must be developed in line with this legislation. Accordingly, it is planned that the reviews will commence in the final quarter of this year, with the first payments being made in the first quarter of 2019, backdated to the 30th March 2018.
I hope this clarifies matters for the Deputy.
