Dáil debates

Thursday, 9 October 2014

Topical Issue Debate

Budget 2015

2:55 pm

Photo of Kevin HumphreysKevin Humphreys (Dublin South East, Labour) | Oireachtas source

I thank the Deputy for raising this matter. The priority of the Government since entering office has been to maintain fully the core weekly rates of payment for pensioners and it has done that successfully over the past three budgets. The Irish pensions system is made up of a number of schemes, based on a number of criteria such as contributions paid, income need and other factors. These ensure that people have an adequate income when they retire. The range of supports has resulted in similar outcomes for male and female pensioners in Ireland. Poverty rates for women and men over 65 have been, in statistically-significant terms, the same over a number of years despite many women having lower earnings than men during their working lives. It should also be noted that the consistent poverty rate for those over 65 is approximately one third of that for those aged between 18 and 64 and roughly a quarter of the rate for those aged 17 and under.

The State contributory pension is one of a number of schemes and the pension is related to contributions made over the years into the Social Insurance Fund by the person. As such, those with a stronger attachment to the workforce and who have paid more into that fund are more likely to be paid under this scheme. The home-maker's scheme was introduced in 1994 to make qualification for the contributory State pension easier for those who take time out of the workforce for caring duties. The scheme allows up to 20 years spent looking after children under 12 years or people with a caring need, to be disregarded when a person’s social insurance record is being averaged for pension purposes. However, it is important to note that the scheme will not, of itself, qualify a person for a pension. The standard qualifying conditions must also be satisfied. For those who do not satisfy these conditions, a means-tested State pension may be available.

Costs in regard to this scheme, under the current rules, are expected to increase in the coming years due to the increase in female employment rates since 1994. The 2007 Green Paper on Pensions indicated that to backdate this scheme to 1953, the year when the unified system of social insurance was introduced, would cost the Exchequer approximately €160 million.  

In regard to women and social insurance payments, it is worth noting that the Actuarial Review of the Social Insurance Fund in 2012 confirmed that the fund provides better value to female rather than male contributors. This is due to the distributive nature of the fund.  The review also examined the changes in the contribution rules and the associated rates of payment which were to be introduced in September 2012.  The review found that those with lower earnings and those with shorter contribution histories still obtain the best value from their contributions.

The Deputy has raised an important issue which we need to examine. I would be happy to sit down with her after the budget to scope out the details and consider a proposal that may be able to address the issue she has identified.

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