Willie O'Dea (Limerick City, Fianna Fail) | Oireachtas source

We have all had constituents get in touch with us about the obvious inequality of somebody who has paid fewer stamps potentially getting a higher pension than somebody who has paid more stamps, because it was over a longer period, when it is averaged out. We discussed this at some length on Committee Stage. Deputy Smith wanted to find out why 1994 was the year picked. There is a very simple explanation for it and I believe it is important that the record of the House should be correct and reflect this. The reason 1994 was picked is because that legislation was introduced in 1994, and not by Deputy Joan Burton in the 2010s. The homemaker scheme was introduced in 1994 by the then Minister for Social Protection, Deputy Michael Woods. The difficulty with it is that it only applied going forward from April 1994. It provided that any woman or person who looks after a child under the age of 12 or a disabled relative can have that year discarded from the averaging denominator. I forget which comes first, the numerator or the denominator, but it can be discarded from the bottom line in any event. It is not considered in the average. As has been said, the difficulty is for people who left the workplace before 1994. Those people are in an invidious position.

Having discussed all of this at length on Committee Stage, the Minister has indicated to us that his Department is already working on developing a new total contribution scheme in which the amount of one's pension would depend on the total amount of contributions paid. There are three things I wish to ask the Minister on his plans in that regard. First, when does he realistically think the country will be in a position to change over to a contributions-based system? Second, will the homemaker's provisions be included in that as currently constructed, or will there be a different rule for homemakers? At the moment, if somebody is applying for a contributory pension, he or she can claim credits as well as paid contributions. What happens to the credits? Will there be provision for credits in a contributions-based system, or will it be just based simply on contributions per se?

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