Seanad debates

Tuesday, 18 February 2014

Adjournment Matters.

Home-makers Scheme

6:50 pm

Photo of Phil HoganPhil Hogan (Carlow-Kilkenny, Fine Gael) | Oireachtas source

I thank Senator Moloney for raising this matter. As she is aware, the homemaker's scheme was introduced in 1994 to make qualifying for a State contributory pension easier for those who take time out of the workforce for caring duties.

To be eligible for the homemaker's scheme, a person must permanently live in the State, be aged under 66, have started insurable employment or self-employment on or after the age of 16 and before the age of 56, not work full-time - although a person can work and earn less than €38 gross per week - and care for a child under 12 or an incapacitated person on a full-time basis. The scheme allows up to 20 years spent caring for children under 12 years of age or incapacitated adults to be disregarded when a person's social insurance record is being averaged for pension purposes. However, it is important to note that the scheme will not of itself qualify a person for a pension.

The standard qualifying conditions, which require a person to enter insurance ten years before pension age, pay a minimum of 520 contributions at the correct rate and achieve a yearly average of at least ten contributions on their record from the time they enter insurance until they reach pension age, must also be satisfied. For those who do not satisfy these conditions and have an income need a means-tested State pension may be available. The 2007 Green Paper on pensions indicated that to backdate this scheme to 1953, the year when the unified system of social insurance was introduced, would cost the Exchequer some €160 million. Under current rules, costs in relation to this scheme are expected to increase in the coming years due to the increase in female employment rates since 1994.

The National Pensions Framework 2010 proposed a system of homemaker's credits to replace the current disregard. Backdating of this credit to 1994 has been considered as part of the broader pensions reform process, including a move to a total contributions approach to pension eligibility. This means that people reaching pension age could have credits rather than disregards applied to their records to cover periods of care since 1994. This would represent an enhancement, particularly for women, and those who take time out of the workforce for caring duties. However, such an approach would impose additional costs and could only be considered in the context of the wider pensions reform debate and in the context of the budgetary process.

I will convey the Senator's anxiety to have this matter dealt with to the Minister for Social Protection. Perhaps in the context of the budgetary process, a start can be made on the provision of some pension respite or cover to some of these recipients.


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