Niamh Smyth (Cavan-Monaghan, Fianna Fail) | Oireachtas source

I have come across numerous cases in my clinic of retired or retiring people who have been adversely affected by the anomaly in how entitlement to the State pension contributory is calculated. I have been presented with a number of situations where individuals, mainly women who have raised their families, are being penalised for having paid a small handful of PRSI payments during what effectively amounts to a previous working life. Having spent a great portion of their lives providing a socially vital service, these women are now being doubly penalised. Not only have they secured no private pension entitlements for this period of their lives but they are now being denied a full State pension. This clearly must change and requires immediate action.

Consideration should be given to amending the calculation method for contributory pensions. The system already disregards time spent working in the home since April 1994 for the purposes of calculating yearly average contributions. We should explore the feasibility of backdating this further. Similarly, consideration should be given to allowing actual past payments to be disregarded, thereby altering the date at which the individual is considered to have entered the permanent workforce. Consideration should be given to allow individuals to disregard up to 200 pre-1994 A1 PRSI payments for the purpose of calculating their date of entry into the workforce.

I will give two examples from my constituency. A lady spent most of her married life working in the home. She entered the workforce for the first time in 2005, aged 56. She qualified for a full State pension in 2015, as she had paid an average of more than 48 weeks of PRSI contributions over ten years.

Another similar lady entered the workforce at the age of 46 in 1995. She paid an average of more than 48 weeks of PRSI contributions over 20 years. However, this lady also worked briefly in the late 1970s, before getting married and staying at home to raise her family. As a result, the Department of Social Protection averages her contributions over 37 years, rather than 20. This reduces the pension to which she is entitled and creates a great inequality in the system.

Despite the fact that the second lady has paid more than twice as many PRSI contributions as the first, she will have her pension greatly reduced while the first lady will be entitled to the full State pension contributory.

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