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

I propose to take Questions Nos. 40 and 44 together.

The State pension is a very valuable benefit and is the bedrock of the Irish State pension system as a whole. There are two State pensions. The non-contributory State pension is a means-tested pension and is funded by general taxation. The contributory State pension is not means tested and is paid from the Social Insurance Fund. Therefore, it is important to ensure those qualifying have made a sustained contribution to the Social Insurance Fund over their working lives. To ensure 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 current homemaker's scheme makes qualification for a higher rate of contributory State pension 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 the contributory State pension also being satisfied. This has the effect of increasing the yearly average of the pensioner, which is used to set the rate of their pension.

I believe that Deputy Gino Kenny's references in his question are to a statement I made in the course of the recent Social Welfare Bill 2016 that the issue of homemaker's credits would be considered in the context of the total contributions approach reform that we are planning. I expect a final paper to be available in the middle of the year, following receipt of data from the independent actuarial review of the Social Insurance Fund which will be used to cost options in this reform.

My Department has estimated that the cost of extending the homemaker's scheme to allow people to avail of the full 20 years currently allowed under the scheme, encompassing periods prior to 1994, could cost some €290 million in 2017, and this figure would rise at a faster rate than the overall costof State pensions.Such funds are not currently available to implement this measure.

Where somebody 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 up to 90% of a full rate pension. Alternatively, they may qualify for a means-tested non-contributory State pension which amounts up to 95% of the maximum contributory rate.

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