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State Pension (Contributory) Eligibility

Dáil Éireann Debate, Thursday - 21 February 2019

Thursday, 21 February 2019

Ceisteanna (190)

Michael Healy-Rae

Ceist:

190. Deputy Michael Healy-Rae asked the Minister for Employment Affairs and Social Protection if a matter (details supplied) regarding women's pensions will be addressed; and if she will make a statement on the matter. [8921/19]

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Freagraí scríofa

The Deputy should note that the "Yearly Average" method of calculating entitlement to the contributory state pension has been in place since the introduction of that pension, then called the Old Age Contributory Pension, in 1961. As a single, comprehensive social insurance scheme was only introduced approximately 8 years previously, a system where people needed a set number of years contributions for a full pension, could not have been introduced, without it either (a) requiring very few contributions for the maximum rate contributory pension, or (b) no-one qualifying at the maximum rate for several decades.

Under the Yearly Average approach, people are paid a rate according to their rateband. For example, someone with 20 years contributions over a 48 year period would qualify at the 85% rate (if they do not qualify for a non-contributory pension at a higher rate of up to 95% instead). These ratebands have been adjusted a number of times over the decades, most recently in 2012 as an alternative to a reduction in the core rate of the pension, which I believe would be the change referred to by the Deputy.

Since 2010, it has been Government policy to replace the Yearly Average system with a Total Contributions Approach (TCA) to establishing the level of entitlement for all new state pension contributory claims from 2020 onwards (TCA2020).

In January 2018, I announced the Government Decision to introduce a new interim Total Contributions Approach (TCA) to the calculation of State Pension (Contributory) for pensioners born on or after 1 September 1946, who were awarded state pension (contributory) under the post 2012 rate bands. This approach, which includes generous provision for homecaring periods, will benefit many such pensioners, especially those who took time out of the workplace for caring purposes. The required primary legislative provisions are contained in the Social Welfare, Pensions and Civil Registration Act 2018, enacted on 24 December 2018. All the necessary regulatory and system changes have now been made to allow the increased payments to begin.

My Department is now reviewing the pension payments of approximately 91,000 pensioners who were awarded less than the maximum rate of pension since September 2012. Given the number of pensioners involved, this work will take a number of months to complete. The increased payments will also include arrears to the 30th March 2018, or the pensioner’s 66th birthday if later. The Department is using information it already has to complete these reviews. However, in quite a number of cases, additional information is required from the pensioners concerned about gap periods in their social insurance records and my Department will be in touch with each of those pensioners individually to get that information.

As regards the TCA model that will apply for all new pensioners post-2020, I launched a public consultation on the design of the full scheme on the 28th of May to which a wide variety of stakeholder groups were invited. A number of workshops were also held on the day to elicit views and feedback. All Oireachtas members were invited to a detailed briefing in Leinster House by my officials shortly afterwards. The consultation was open for over 3 months and the Department received almost 300 responses from individuals and organisations. Those submissions outlined the views of respondents on a number of issues, including the number of years required for a full pension, as intended as part of the consultation process.

I have recently been provided with an analysis of the views submitted in the consultation. Having considered this analysis, I intend bringing a proposal to Government shortly, setting out the proposed details of the scheme. When the Government has agreed the approach to be taken, I will initiate the work required to introduce this reform. I can confirm that the model will include provision for homecaring periods.

I hope this clarifies the matter for the Deputy.

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