Edward Timmins (Wicklow, Fine Gael)
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89. To ask the Minister for Employment Affairs and Social Protection to review the contributory pension entitlement of someone with fewer than 520 contributions; and to grant those recipients a pro rata pension. [50762/25]

Edward Timmins (Wicklow, Fine Gael)
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I ask the Minister to review the contributory pension entitlement for someone with fewer than 520 contributions and look to give them a pro rata pension. This policy imposes a cliff-edge cut-off. It is very unfair. Someone with 519 contributions gets nothing but 520 would entitle them to get between €99 and €120 per week, and sometimes much more.

Dara Calleary (Mayo, Fianna Fail)
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As the Deputy may be aware, the previous Government established the Commission on Pensions to review the State pension system and make recommendations for its future. The commission strongly supported the retention of the qualifying criterion of 520 paid contributions. In part, this is because the actuarial value of the contributory State pension is currently estimated at approximately just under €400,000, so it is reasonable to require people claiming a contributory pension to have made at least 520 paid contributions over the term of their working life to qualify for a payment. Once a person reaches the qualifying criteria of 520 paid contributions, their rate of payment is determined by their total number of contributions, paid and credited, and the applicable calculation method.

In December 2023, legislation was enacted to introduce a series of landmark reforms to the State pension system in response to the commission's other recommendations. A key measure was the introduction of a flexible pension system. This new system is about providing people with choice. People will still be able to retire at 66 and draw down their pension as they always have. Additionally, they may now choose to defer claiming their contributory state pension up to age 70 and receive an actuarially based increase in their weekly payment rate.

People can decide for themselves what best suits their needs and circumstances. For example, a person who reaches age 66 who does not have sufficient contributions to qualify for a contributory State pension may be able to use this period to continue to work to establish entitlement or increase their level of payment. Where a person does not satisfy the conditions to qualify for the contributory pension or qualifies for less than the maximum rate, they may instead qualify for the means-tested non-contributory pension with a maximum payment equivalent to over 96% of the contributory rate.

Edward Timmins (Wicklow, Fine Gael)
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I also want to address the fact that the home caring scheme does not allow for any additional credits. This is unfair as a mother often gives up work in order to care for her children and is given no increased credits for this time. Can this be revisited as it penalises a parent who makes the decision to give up work, a decision which actually saves the State money?

Dara Calleary (Mayo, Fianna Fail)
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One of the major reform measures was the enhanced State pension provision for those who have been caring for incapacitated dependents of 20 years or more.

It is being done by attributing the equivalent of pay contributions to such long-term carers to cover gaps in their contribution records for the period in which they were caring for an incapacitated dependant. The measure is available to those who reach State pension age from 1 January 2024 and to those currently over the pension age.

In September 2023, we launched an online system for people to register for long-term caring contributions. We continue to work with people on this. This is the first time that a pension provision has been made for carers. This discussion follows that with Deputy O'Shea just now, on supporting carers and giving them the backup they need in their older years.

Edward Timmins (Wicklow, Fine Gael)
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I want to address the homemaker's scheme, which is often confused with the home carer's scheme. This only applies from 6 April 1994. Again, this date is an arbitrary cliff edge. It discriminates against people who cared for children who were 12 years of age before that date. It is completely unfair and illogical. It should apply to all caring for children and not only those cared for after 6 April 1994. Similarly, the home caring periods are only applicable from 6 April 1994. Will the Minister look at including all years prior to 6 April 1994?

Dara Calleary (Mayo, Fianna Fail)
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We have a range of supports available. I am happy to consider the proposal made by Deputy Timmins, but we must also ensure the State pension system is sustainable. The demographics of our country are changing very much as we speak. At present, we have four workers for every person over the age of 66. By the time we get to 2050, however, which is not that far away, this figure will be down to two. In that context, we will have to make decisions that ensure the long-term sustainability of our pension system in order that it will continue to support those who need it in the years to come, especially as those demographic changes happen. We have increased PRSI rates with regard to employees, employers and the self-employed across the Social Insurance Fund in order to sustain it. With that in mind, I will ask the officials to look at this proposal and come back to Deputy Timmins.

Edward Timmins (Wicklow, Fine Gael)
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Many of these people will have passed away by 2050.