Seanad debates

Thursday, 20 October 2005

2:00 pm

Sheila Terry (Fine Gael)
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I welcome the Minister of State at the Department of Health and Children, Deputy Seán Power, to the House. I raised this matter on the Adjournment as I believe there is a group of women being discriminated against in our society. Some of them were discriminated against in the past when forced to give up their jobs in the late 1960s and early 1970s because of the marriage ban. Subsequently, other women chose to give up their jobs, remain at home and rear children or care for a sick child or relative. They are discriminated against because they are not included in the present homemakers scheme, which is only applicable from 1994. That scheme recognises women who choose to leave the workforce for a period not greater than 20 years to care for children or a sick child or relative. I urge the Minister to apply the same scheme retrospectively from 1970.

It should be a parent's choice to remain at home for a number of years and the State should recognise this and support the parents. Currently there is no support but hopefully this will change when we address the child care issue and the State will recognise the work of parents who choose to stay at home for a number of years. However, a group of women is in limbo and has been actively discriminated against by the introduction of the homemakers scheme. It is wrong that the Minister introduces legislation to address a certain group yet discriminates against another group. Perhaps this could be challenged by the Equality Authority.

I urge the Government to address this anomaly in the forthcoming budget. At present there are 110,000 home carers receiving the tax allowance who are raising children up to the age of 18 years. In the year 1970 and before, women chose to remain at home to raise children or care for elderly parents. We know the contribution made to the community and I want that to be recognised. This could be done simply without huge cost to the State by recognising the years out of work and by granting the women eligibility to a pension in retirement. In this society we recognise equality, attempt to gender-proof legislation and avoid situations giving rise to discrimination but this is one area that must be addressed. I ask the Government to examine this matter and address it.

Photo of Seán PowerSeán Power (Minister of State, Department of Health and Children; Kildare South, Fianna Fail)
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On behalf of the Minister for Social and Family Affairs, Deputy Seamus Brennan, I wish to reply to the matter raised by Senator Terry whom I thank for raising the matter.

The social welfare pension rights of those who take time out of the workforce for caring duties are protected by the homemakers scheme. The scheme was introduced from 1994 and allows up to 20 years spent on caring duties to be disregarded when a person's insurance record is being averaged to assess entitlement for contributory pension purposes. However, it must be borne in mind that the scheme will not of itself qualify a person for a pension. The standard qualifying conditions for pensions, which require a person to enter insurance ten years before pension age, pay a minimum of 260 contributions at the current 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. The homemakers scheme is designed to mitigate the effect of periods spent on caring duties when a persons insurance record is being averaged for pension purposes.

The Government is anxious to ensure that as many people as possible can qualify for pensions in their own right. A number of measures have been introduced over the years to which make it easier for people to qualify for pensions. In 1997 the yearly average number of contributions required for pension purposes was reduced from 20 to ten and in 2000 a special half rate pension was introduced based on pre-1953 insurance contributions. Pro-rata pensions are also available to allow people with mixed rate insurance records to receive a payment and this is of benefit to people who may have worked in both the public and private sectors. This set of measures is of particular benefit to women who may have less than complete social insurance records due to working in the home. It is estimated that approximately 87% of women aged 65 years are at present receiving social welfare support, either in their own right or as qualified adults on the pension of their spouse or partner.

There are, of course, those who will not benefit from the homemakers scheme and who cannot qualify for a pension in their own right. In this regard, the Government is committed to increasing the payment for qualified adults, age 66 years or over, to the same level as the personal rate of the old age non-contributory pension and to facilitate the direct payment of the allowance to spouses and partners. A number of special increases have been given over several budgets in pursuit of this target, totalling €56.47 per week since April 2000. Qualified adult allowance rates for those over 66 are now between 66% and 77% of maximum personal rates, which were between 60% and 67% in 2000. Also, since 2002, new pension claimants can opt to have the qualified adult allowance paid directly to their spouse or partner. The administrative and legislative implications of enhancing these provisions are being examined to ensure that more qualified adults can receive a personal payment.

In August 2000, the Department of Social and Family Affairs published a review of the qualifying conditions for old age contributory and retirement pensions. This review also included a general examination of the homemakers scheme and the report suggested a number of reforms for further consideration. These included the possibility of changing the operative date of the scheme and replacing the disregard system with one based on actual credited contributions.

In general, changes to insurability of employment, etc., are not back-dated, and the same principle was applied to the homemakers scheme in 1994. Apart from that, there would be practical difficulties in certifying periods of caring and very significant costs involved. As I already indicated, the scheme will not of itself qualify a person for a pension and, consequently, a significant proportion of any cost will involve improvements for those already in receipt of a social welfare pension.

As Senator Terry may be aware, the Minister is currently reviewing the operation of the social welfare pension system, including the relationship between contributory and non-contributory schemes, and the operation of means testing in the context of old age pensions. The needs of people who are outside the social welfare pensions system, including those excluded by virtue of time spent on caring duties, can best be addressed in the context of that review.