Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
Link to this: Individually | In context | Oireachtas source

35. To ask the Minister for Social Protection if he will provide a detailed report on the impact of the changes to contribution requirements for the State contributory pension made over the austerity years, including the numbers of men and women who are no longer eligible for the full contributory pension in each of the years since the changes; and if he will make a statement on the matter. [8443/17]

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
Link to this: Individually | In context | Oireachtas source

I want to warn the Minister that he is sitting on a ticking timebomb of anger among pensioners. The changes in entitlement to the contributory State pension that were introduced by Deputy Burton in 2012 represented one of the most sneaky, nasty and covert cuts of the Fine Gael-Labour Party Government. Some 36,000 pensioners have already been affected by these cuts and changes. As this number grows exponentially every year, thousands more will find to their shock and horror that their entitlement to the contributory State pension has been cut significantly. Will the Minister rectify this nasty cut?

Leo Varadkar (Dublin West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The overall concern in recent years has been to protect the value of weekly social welfare pension rates. Annual expenditure on pensions is approximately €7 billion and is increasing at an approximate rate of €200 million, or €1 billion every five years. Maintaining the rate of the State pension and other payments is critical in protecting people from poverty in old age. A number of changes in recent years had an impact on whether a person could qualify for a contributory pension, based on his or her paid contributions, and on the rate bands for new pensioners with a yearly average of less than 40 contributions. The changes to the rate bands have had no impact on the position of people who would have qualified for a full-rate contributory pension prior to the introduction of these changes, as long as they meet the minimum number of 520 contributions required. Such people continue to qualify for the full-rate pension. The changes to the rate bands affected the rate of pension payable to some new pensioners who qualify for a reduced rate contributory pension. It is important to note that no pensioners have had their pensions reduced, but some new pensioners receive pensions at rates less than they would have received prior to the changes.

Bríd Smith (Dublin South Central, People Before Profit Alliance)
Link to this: Individually | In context | Oireachtas source

That is a reduction.

Leo Varadkar (Dublin West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

According to the most recent figures available to me, 43,609 recipients of the State contributory pension are in the rate bands affected by the changes introduced in 2012, 57.8% of whom are women and 42.2% of whom are men. I do not have data on how many people are on alternative payments as a result of these changes. It would be difficult to estimate such a number with accuracy. More detailed data will be made available in the context of the consultation phase of the total contributions approach reform later this year. Someone who does not qualify for a full-rate contributory pension might qualify for an alternative payment. If his or her spouse has a contributory pension, he or she might qualify for an increase for a qualified adult amounting up to 90% of a full-rate pension. Alternatively, he or she might qualify for the means-tested non-contributory State pension, which can amount to 95% of the maximum contributory rate.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
Link to this: Individually | In context | Oireachtas source

In the spirit of the sneaky, clandestine and disgraceful cut that was imposed by Deputy Burton, the Minister has answered this question by attempting to baffle people with figures. He has sought to obscure the nastiness of the pension apartheid that was introduced by Deputy Burton in 2012. As a result of the changes that were made at that time, people who are now coming into their pension entitlements in the expectation of getting all or at least 98% of those entitlements could lose 15%, 35% or even 60% of the pensions to which they would have believed they were entitled before these cuts were made. The Minister mentioned the requirement to have made 520 contributions, but I remind him that this number used to be much lower. As a result, some people who believed they were entitled to the contributory State pension because they made contributions at the level that would previously have given them such an entitlement will not get a pension at all. I do not have enough time to go through the cases of this type with which I am familiar. A person in these circumstances might be entitled to apply for the means-tested pension, but the means test means they might not even get the non-contributory pension.

Leo Varadkar (Dublin West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I apologise if I baffled the Deputy with my answer but I thought it entirely clear and factual.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
Link to this: Individually | In context | Oireachtas source

It was misleading as to the impact of the 2012 cuts.

Leo Varadkar (Dublin West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The way we calculate the contributory State pension is very odd. If a person has 520 contributions, or approximately ten years of contributions, he or she could potentially get a full pension. If a person works for nine years and 11 months, he or she could get nothing. There is an averaging system that is very odd because it works particularly against people who started work early but who have a big gap in contribution records. We should move to a new system with an approach taking in total contributions. That would be similar to how the Deputy's pension or a public service pension is calculated, with a link to the number of years contributed. If a person works for 20 years, he or she would get 20 fortieths and if a person works for 40 years, he or she would get 40 fortieths. It is something like that and it is the way every other contributory pension is calculated. The way we have done the State contributory pension has been very odd for a long period.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
Link to this: Individually | In context | Oireachtas source

Yes but all this was made very considerably worse as a result of what was done in 2012. The average and number of contributions that had to be made for the entitlement were changed in 2012. Huge numbers of people who would have been entitled to most or all of the contributory pension before 2012 now find themselves getting considerably less. The Minister has acknowledged there is a problem and he should have acknowledged that there was a dramatic change because of cuts imposed by the Government in 2012. What is he going to do about it and when will he do it? Pensioners are getting letters from the Minister's Department when they reach 66 and they are shocked to discover they will either not get the contributory pension when they have worked for many years and believed themselves entitled to it or they are getting significantly less than people who have made fewer contributions or worked for fewer years but happened to get their pension entitlement before the Government's cuts were made. That is the point so what will the Minister do about it?

Leo Varadkar (Dublin West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

There are a couple of issues. Anybody who has made 520 contributions or worked ten years from a working life of 40, 45 or 50 years is entitled to a State contributory pension. Those who did not work for that time may not be. What we had previously and we still have is a position where there is very little correlation between the contributions made and the pension that one gets at the end. That is the problem and it must be changed. We must introduce a new system involving total contributions that gives a person a State pension based on the amount of contributions made. If a person makes many contributions in a working life, that person would get a higher pension than those who made very few. Within that we must make provision for a homemaker's credit to recognise the fact that people take absence from work.

Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
Link to this: Individually | In context | Oireachtas source

It should be made retrospective.

Leo Varadkar (Dublin West, Fine Gael)
Link to this: Individually | In context | Oireachtas source

If we do so, we must cost the option. All of these issues have a cost but that is the approach we are taking.