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

The State pension system is very effective in ensuring that pensioners have a decent standard of living and results in more gender-equal outcomes in Ireland than in most European countries. The gender poverty gap for those over 65 in Ireland, using European Union, EU, figures, is 2.1%, compared with 4.2% across the EU as a whole. There are a number of reasons for this. First, other EU state pension systems generally relate the pension to lifetime earnings and ours does not. Second, our non-contributory pension is paid at 95% of our contributory pension rate. Finally, we have better provisions for widows in Ireland than in most EU countries. These factors result in the average payment to men over 66 being 2% higher than for women, despite lower average contributions into the Social Insurance Fund. This, combined with the targeted nature of the non-contributory pension, means Central Statistics Office poverty rates for men and women over 65 are both low and effectively at parity.

A universal State pension, paid at full rate to everyone over 66, regardless of their contributions or their means, would either be very expensive - costing an estimated extra €1 billion per year - or, if introduced on a cost-neutral basis, requiring a 14% reduction in the current rate of the State pension. This would be difficult to justify given that those with significant additional incomes would benefit most from the Deputy's proposal. Work is under way to replace the "yearly average" system, as I mentioned earlier, with a total contributions approach. The impact of this reform on gender is being considered very carefully and it will be assessed on its respective impact upon men and women.

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