Willie Penrose (Longford-Westmeath, Labour) | Oireachtas source

One can say with absolute certainty that the current pension eligibility system for old age pensions is complex, riddled with established and pronounced anomalies, discriminatory and clearly not fit for purpose in the current environment. It lends itself to wholesale reform in the interests of equity and fairness rather than, as the Minister stated, ad hoccorrections to some of these glaring problems or anomalies, which generally result in specific problems being addressed with a probable unforeseen adverse consequences down the line and thus triggering another chain reaction.

I want to state unequivocally and unambiguously on behalf of the Labour Party that we support the Fianna Fáil motion. The motion refers to a preference for a system grounded, to some degree, on total contribution record, which will need to be debated and examined, as emerged from the national pensions planning framework in 2010, which Fianna Fáil commissioned and pronounced at that time. In my view, it would eliminate many of the complexities and anomalies and ensure that people are fully au faitwith their entitlements to pensions and the precise amounts thereof well in advance of reaching the specified pension age. This has been complemented by the auto-enrolment scheme, with contributions or savings being invested in a private scheme to ensure that people have adequate income provision for their needs upon retirement.

Undoubtedly, the changes made by the former Minister for Social Protection, Deputy Burton, in 2012 by way of increasing the number of bands pertaining to the threshold of eligibility emanated from the long-term strategy set out in the 2010 national pensions framework. These have caused significant difficulties by way of reductions of up to €35 per week for some recipients and that matter must be addressed immediately. Over 60% of those who have been negatively affected are women. It should not be forgetten that up to 38% of the people involved are men. One cannot but note that some of these adjustments that were, and clearly are, regrettable were not effected for some ulterior or specific reason other than to achieve the necessary savings as set out in the framework at the time. In 2012, we were in the midst of an unprecedented financial crisis, the details of which are well known so there is no need to recount them save to say that the deficit was over €13 billion. In 2018, we will have a zero deficit or, more likely, a surplus. A large number of measures were implemented to restore the State's finances. Due to the collapse in employment, as a result of which the unemployment rate rose to in excess of 15%, there was a huge fall in the volume and value of PRSI receipts and an unsustainable deficit of €2.8 billion in the Social Insurance Fund in 2012. I am not trying to justify the measures introduced, I am simply trying to explain how they arose. The troika was exerting extensive pressure to put the State finances on a sustainable path and the situation was clearly recognised in the national recovery plan by Fianna Fáil in 2010, which committed to changes in the State pension that would require some structural change to ensure the sustainability of State pension provision going forward.

This was a measure in 2012 that should now be reviewed and reversed in the context of the fact that the Social Insurance Fund will likely be in surplus to the tune of €1 billion this year. That will grow to at least €2 billion in 2018. As we have seen with some of the measures that had to be introduced during the very difficult years, as the economy has recovered, there has been process of pay restoration in the context of reductions imposed under the financial emergency measures in the public interest, FEMPI, legislation. The Labour Party believes that a similar process should be adopted or action taken in respect of pension entitlement and it should now be restored. This is just one aspect of this pension debate, albeit a very important one.

The media seems to be a bit confused because it was in 1997 that then Government passed legislation to provide for an increase in the minimum of paid contributions to the contributory State pension. That increased from 260 to 520 for persons who reached 66 after 5 April 2012, so it automatically came into being. It was not implemented by the then Minister, Deputy Burton, or by anybody else so let us be fair and clear. The record is very clear. I was here in 1997 when all of that happened.

Thankfully, people in Ireland are living longer. When the old age contributory pension was introduced in 1961, life expectancy was 68 years for men and 72 years for women. Now it is 79 years for men and 83 years for women. The increase in life expectancy means that the number of people aged 65 or older is rising all the time. The 2016 census indicates that the proportion of the population in the 65-plus age cohort has risen by one fifth since 2011, while the recent CSO population projections in 2013 forecast an increase of almost two thirds in this cohort between 2011 and 2026.

When we review the pension entitlements in an historical context, there can be no doubt but that women were the subject of significant financial discrimination. The averaging system introduced in 1961 bears eloquent testimony to this State-sponsored and supported discrimination. The system of averaging takes account of a person's contributions for the first year of their employment and the last day prior to reaching pension age. This, in effect, could extend over a period of 48 or 50 years. For example, the working life of a woman who works from the age of 18 to 26, gets married, is then out of the workforce rearing her family until 38 years of age and retires at the age of 66 is effectively 36 years. However, for averaging purposes, she is deemed to be 48 years in the workforce and this leads to an automatic reduction in her pension. Indeed as Minister of State in the Department of Social Welfare in 1994, Deputy Burton introduced the homemaker's scheme which acknowledged for the first time the issue of child-rearing with regard to conditions pertaining to qualification for the State pension. The scheme provides for up to 20 years to be disregarded for contributory State pension purposes. This helps to deal with the travesty arising from the averaging provision.

Of course, the issue which arises and which cannot be dismissed is the effect of the marriage bar that was in place from 1933. As a result of the latter, an entire cohort of women were affected from 1933 until the bar was removed in 1973. That was discriminatory and outrageous in terms of its gender focus. One must ask how it could stand except if one looks at Article 41.2.2° of the Constitution. I wonder whether that was where it gained solace and was protected. European law was introduced in 1973 and wiped it out. Women who got married were banned from working in the public service and financial institutions but no such prohibition was implemented for spouses who could have been working side by side with them in the same jobs. It was only our entry to the European Economic Community in 1973 that precipitated the abolition of this preposterous and discriminatory measure against women. As a young Deputy in the early 1990s and 2000s, I was strongly in favour of and advocated a system whereby all women who found themselves the subject of discriminatory treatment arising from the marriage bar should have received from the State, via the Department of Social Welfare, an imputed contribution record of 52 contributions or stamps for each year they suffered under the marriage bar. That would at least have served to rectify the injustice when they reached pension age. While the 1994 homemaker's scheme was an advance in terms of recognising the practicalities of child-rearing, it did not address the glaring deficit stretching back to least 1973. That anomaly remains a major injustice to this day. Of course, it could be looked at but is now a cost issue.

There is also an urgent need for action on the overall gender pension gap that disproportionately impacts upon women. A number of factors contribute to the gender pension gap, such as the predominance of women in low-paid and part-time employment as well as the fact that it is women who usually take career breaks to look after children or relatives.

Another bugbear of mine in the context of the pensions system is the concept of the qualified adult dependant, usually the wife or partner because the system was clearly based on the male breadwinner model. This should clearly be changed in the current context.

The wife had her value assessed initially at 70% and now 90% of the value of the recipient. She is now treated as an appendage of her husband, instead of the couple being dealt with as a unit, whereby if the husband qualifies for a certain figure based on his contributions that his wife or partner should be treated similarly, and get the same amount. It is only recently that she would have been paid out a reduced sum in her pension in her own name. Previously, it was part and parcel of the husband's pension payment, and sometimes she might not receive a red cent of that. Let us consider that and treat both parties as a unit and not treat the wife or partner as a percentage in terms of qualifying payment.

There is clearly a strong argument for a provision to be introduced to allow the exclusion of a fixed number of years where no or low contributions were made for lifetime averaging purposes. This can be addressed by the introduction of the total contributions system. As Ireland slowly recovers from the economic crisis, reverting to the pre-2012 system should be a central part of a wider strategy, which is to achieve a more equal Ireland between men and women in pay, pensions and in taking up responsibilities of care. This strategy should also include compensating those who have lost out due to the 2012 changes.

I have also spoken in support for the elimination of the mandatory retirement age in employment contracts, where people who voluntarily wish to do so should, if their heads are good, continue to work as they wish. It would help to address another major issue to which Deputy John Brady referred, namely, the abolition of the State pension transition. Another pet hate of mine, and something that irritates myself and my colleagues, is that at 65 years one is compulsorily retired in accordance with one's contract. One is paid jobseeker's benefit for nine months, and then one has to apply for jobseeker's allowance which is means tested for three months, and it is possible to lose out because of this. At the stroke of a pen the period for jobseeker's benefit available to those who are forced to retire at 65 years should be extended to 12 months to deal with the three month period with which they are now faced. That would stop the situation where people who have worked 44 or 45 years are forced to turn up at a social welfare exchange, having never set foot in one their whole lives. Give these people jobseeker's benefit until they reach the pension age, which ought to be 66 years.

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