Andrew Doyle (Wicklow, Fine Gael) | Oireachtas source

I thank Senator Byrne for raising this issue. As she will be aware, the marriage bar was a rule that existed in most of the public service and some private sector employments whereby women were required to leave their employment upon marriage. It was abolished in 1973 when we joined the EEC. Where such employees were public servants, they paid a reduced rate of PRSI which did not provide cover for the State pension, and the marriage bar would not have impacted on their State pension entitlement. It may, however, have impacted upon their entitlement to a public service pension, which is a matter for the Minister for Public Expenditure and Reform.

Our State pensions system is comprised of a number of schemes based on criteria such as contributions paid, income need and other factors. This is to ensure that people have an adequate standard of living in old age. The State pension contributory is one such scheme, and its rate of payment is related to contributions made over the years into the Social Insurance Fund. As such, those who have paid more into that fund are more likely to be paid under the scheme. The actuarial review of the fund in 2012 confirmed that the fund provides better value to female than male contributors due to the redistributive nature of the fund. Entitlement to the contributory pension is calculated by means of a yearly average calculation, whereby the total contributions paid or credited are divided by the number of years of the working life. Payment rates are banded. For example, someone with a yearly average of 48 contributions will qualify for a full pension, whereas someone with a yearly average of 20 may qualify at the 85% rate.

The homemaker's scheme, introduced in 1994, makes qualification easier for those who took time out of the workforce on caring duties. It allows up to 20 such years in the period since its introduction to be disregarded when the yearly average is calculated, making it easier to qualify for a higher rate of payment. I am informed that the cost of backdating this scheme before 1994 could be as high as €280 million per year. Given that this would not benefit the poorest pensioners with little or no means, namely, State pension non-contributory and maximum-rate contributory pensioners of low means, the Government would have to consider such proposals carefully. Such changes would impact deeply on moneys available to fund measures for all pensioners and for other people who depend on payments from the Department of Social Protection, many of whom live on much lower incomes. Where someone does not qualify for a full rate contributory pension, he or she may qualify for a means tested non-contributory pension, amounting to 95% of the maximum contributory rate. Alternatively, if the spouse is a State pensioner, his or her most beneficial payment may be the increase for a qualified adult payment, amounting to up to 90% of a full contributory pension.

Work is under way to replace the yearly average system with a total contributions approach. Under this approach, the rate of pension paid will more closely reflect the total number of contributions. The position of homemakers is being carefully considered in developing this scheme. It is expected that this approach to pension qualification will replace the current one from around 2020.