Dáil debates

Wednesday, 17 January 2018

Ceisteanna - Questions - Priority Questions

State Pension (Contributory)

10:50 am

Photo of Regina DohertyRegina Doherty (Meath East, Fine Gael) | Oireachtas source

I thank the Deputy for her question and I want to be able to answer it properly. She is specifically asking about the homemaker's credit and not about the anomaly. If she does not mind, I am going to shoot to a supplementary response because it more freely answers the question she has asked me. In practice, there are a number of factors that make it impossible to be precise. That is not the correct reply - I beg the Deputy's pardon.

When the contribution pension was introduced in 1961, a yearly average approach was used for calculating entitlements. As reckonable social insurance had just been introduced eight years prior to that, no one would have had the 30 to 40 years of contributions necessary to be paid under a total contributions approach. However, having a yearly average model would allow many people to qualify for a full pension and with the extension of PRSI over the year, notably to self-employment and farmers in 1988, a total contributions approach can be used from around 2020 without disadvantaging people in those sectors. They will have a 30-year window to accumulate what their contributions are. The main difficulty with the yearly average approach is that it is possible for people to start to pay social insurance at a much later stage in life and still qualify for pensions to the maximum rate, which is not very fair. That is why the yearly averaging system is going to be changed, hopefully, to a total contributions model.

The reason the change was introduced at that time - I cannot tell the Deputy whether the date was arbitrarily chosen and, obviously, I was not around at that time - was to acknowledge genuinely that women stay at home and we take choices to come out of the workforce and to rear our family. That change was introduced at that time to acknowledge the huge service to the family, community and society.

I am speaking off the top of my head, only because I have had experience of introducing measures since I became Minister and I have had to pick a start date. I commit to the Deputy that I will find the answer to why that date was picked and whether we looked at different dates at the time. If the Deputy can give me some space, I will come back to her later today with a specific answer. I do not know whether that date was arbitrarily chosen or whether we picked it for a reason. I will come back to her on that later today and I am sorry I do not have a better answer for her on that.

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