Dáil Éireann Debate, Thursday - 12 July 2018
701. Deputy Martin Heydon asked the Minister for Employment Affairs and Social Protection the status of the preparation of legislation to facilitate reviews for those in receipt of contributory pensions post 2012 who took time out to care for family; when these reviews will commence; and if she will make a statement on the matter. [32043/18]
Amharc ar fhreagraThe introduction of a total contributions approach, TCA, to pensions calculation was signalled by the then Government in the national pensions framework in 2010, with a target date of 2020 for its implementation. On 23 January last, this Government agreed to a proposal that will allow pensioners affected by the 2012 changes in rate bands to have their pension entitlement calculated on a TCA basis, including provision for up to 20 years of a new home caring credit.
The TCA ensures that the totality of a person’s social insurance contributions, as opposed to the timing of them, determines what their final pension outcome will be. In particular it will benefit people whose work history includes an extended period of time outside the paid workplace raising families or in a full-time caring role. Crucially, unlike the proposed homemaking credits proposed in 2010, the home caring credit now proposed will apply to periods both before and after 1994. This recognises that most people reaching pension age between 2012 and 2019, if they had taken a home caring break, would most likely have done so before 1994.
This approach will make it easier for many post-2012 pensioners affected by the 2012 rate band changes and who are currently assessed under the yearly average model to qualify for a higher rate of the contributory State pension. A person who reached pension age after 1 September 2012 and who has a 40 year record of paid and credited social insurance contributions, subject to a maximum of 20 years of the new home caring credits, will qualify for a maximum contributory pension where they satisfy the other qualifying conditions. Up to ten years of other credits can be awarded when they were on jobseekers or illness benefit and they are also subject to the total credits not exceeding 20 years.
Legislation is currently being drafted and there is a requirement for this to be enacted to enable implementation of these arrangements, and a number of options regarding the best approach to bringing that legislation are being considered. Following this, what is most important is that the information technology, IT, solutions are ready in line with the legislation because I have made a commitment to pay people from the first quarter of next year. I must ensure that the IT systems are developed to proceed with those plans. Accordingly, it was planned that the reviews would commence in the final quarter of this year, with the first payments being made in the first quarter of 2019. We are still on course to meet these targets.
I trust this clarifies the matter for the Deputy.
