Leo Varadkar (Dublin West, Fine Gael) | Oireachtas source

The rate of payment of a State contributory pension to a person is related to the number of contributions made by the person during the years into the Social Insurance Fund. There is also a widow’s contributory pension which is generally paid at the full contributory pension rate. The exact same rules apply to women as men. Entitlement levels are calculated by means of a yearly average calculation, where the total contributions made or credited are divided by the number of years of the working life. Payment rates are banded. For example, someone with a yearly average of 48 contributions will qualify for a full State pension, whereas someone with a yearly average of 20 will qualify at 85% of the full rate. More generous conditions apply to widows' pensions.

The homemaker’s scheme was introduced in 1994 to make State contributory pension qualification easier for those who had taken time out of the workforce for caring duties. It allows up to 20 such years, in the period since its introduction, to be disregarded when a record is being averaged for pension purposes.

Where people do not qualify for a full rate contributory pension, they may qualify for an alternative payment. If their spouse has a contributory pension, they may qualify for an increase for a qualified adult amounting up to 90% of a full rate pension which by default is paid directly to them. Alternatively, they may qualify for a means-tested State non-contributory pension which amounts to up to 95% of the maximum contributory rate.

It is planned that a total contributions approach will replace the yearly average approach from around 2020 and the position of homemakers will be carefully considered in the context of that reform. Officials of my Department are working on the detailed development of the new total contributions approach, with a view to making proposals for consideration available to the joint Oireachtas committee in the first quarter of next year. I hope this clarifies the matter for the Deputy.

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