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

I propose to take Questions Nos. 52 and 53 together.

The State pension is a valuable benefit and is the bedrock of the pension system. There are two State pensions. First, the State pension non-contributory is a means-tested pension funded from taxation. Second, the State pension contributory, which is not means-tested and is paid from the Social Insurance Fund. Accordingly, it is important to ensure those qualifying have made a sustained contribution to the Social Insurance Fund over their working lives. To ensure that the individual can maximise their entitlement to a State pension, all contributions, paid or credited, over their working life from when they first enter insurable employment until pension age are taken into account when assessing their entitlement and the level of that entitlement.

The homemaker's scheme makes qualification for a higher rate of State pension contributory easier for those who take time out of the workforce for caring duties. The scheme, which was introduced in and took effect for periods from 1994, allows up to 20 years spent caring for children under 12 years of age, or caring for incapacitated people over that age, to be disregarded when a person’s social insurance record is being averaged for pension purposes, subject to the standard qualifying conditions for State pension contributory also being satisfied. This has the effect of increasing the yearly average of the pensioner, which is used to set the rate of his or her pension.

The marriage bar describes a rule that existed in most of the public service, and some private sector employments, where women were required to leave their employment upon marriage. It never applied to self-employment and the practice was abolished in 1973 when Ireland joined the EEC. As it was a rule rather than law, married women could either return to work or take up other work, and many did. It is worth remembering that public servants recruited prior to 1995 paid and still pay a reduced PRSI rate of 0.9% with no contribution from the employer. Accordingly, they are not entitled to the State pension, regardless of gender and marital status. In these cases of public servants recruited prior to 1995, had they not got married, they still would not be entitled to a State pension. This also applies to men. In such cases, therefore, the marriage bar would not generally have impacted on State pension entitlement, as they would not have qualified for that payment had they remained in public sector employment. Instead, by impacting upon their continuing public service employment, the marriage bar’s pension implications, where they exist, more generally relate to a person’s eventual entitlement to a public service pension. Any questions regarding this issue are a matter for the Minister for Public Expenditure and Reform.

Where someone does 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. Alternatively, they may qualify for a means-tested State pension non-contributory, which amounts up to 95% of the maximum contributory rate.

I have confirmed my intention to develop, publish and commence the implementation of an action plan for the reform of pensions. This action plan will include a roadmap for the reform of the State pension. It is planned that a total contributions approach will replace the yearly average approach from around 2020. The position of homemakers will be carefully considered in the context of that reform.

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