James Reilly (Fine Gael)
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The issue I wish to raise here today is one I raised on the Order of Business last week and it was dealt with in the Lower House as well. It is an issue that is not going to go away, namely, the inequity in our pension situation whereby at least 23,000 women are being disadvantaged by the pensions system in a manner which was brought about and exacerbated by legislation passed in 2012. I sought that the Minister for Employment Affairs and Social Protection, Deputy Regina Doherty, would come into the House to tell us how she is going to address the issue. I welcome the Minister of State, Deputy Damien English, here today who is responding on behalf of the Minister.

The points I made last week are worth making again. We have a bad history in this country in terms of the manner in which we treat women. It is unjust to have a system in place that punishes women for their act of generosity who took time out from work to rear children, who are the future of our nation, and to care for the elderly and the vulnerable. It is an injustice that cannot be allowed continue. I am acutely aware that this situation has been ongoing for some time and it will cost a considerable sum of money to correct. As far as I am concerned there are two phases to it. One is the ongoing injustice that comes every month with the pension and the injustice of back-payments that are due and should be paid. Many of those affected are citizens who have stood by this country in the worst of times and they are coming to the last quarter of their lives. Some of them may not have a huge amount of time left although we are all living longer, which is good news. However, it is not good news if we start treating a subsection of people in our elderly population differently. When we had very little money in this country in the heat of the crash we ensured that victims of symphisiotomy were compensated. I was there as Minister for Health to make it happen. We also addressed the Magdalen laundries issue and established a commission of inquiry into the mother and baby home in Tuam. Those were all issues that primarily affect women. Men are affected as well but not to the same extent.

I wish to highlight one statistic that has emerged, namely, that 2.9% of men over 65 are living in consistent poverty while just 2.6% of women in that age group were living in consistent poverty. The percentage of women in that age group is a greater absolute number than the number of men. Neither situation is something of which the Government is proud or that we should allow continue. Both situations must be addressed. It certainly does not indicate that women over the age of 65 are doing better than men in terms of their incomes. Acknowledging that there is a big job of work to be done, what I wish to ask the Minister today is how long the review will take and how long it will be before action will be taken? How long will it be before the correction of this injustice to pensioners is addressed? Thankfully, we know unemployment is reducing in this country and, therefore, the burden on the Exchequer from that point of view should be less. We know that the Government is taking in more revenue. The least these women can expect is that the current situation is corrected as quickly as possible and a pathway is developed to address the outstanding back-payments, which is a considerable sum of money.

A loud and clear message needs to go out from here today and I hope it is one the Minister agrees with. I know in my heart she does. We cannot allow the injustice to continue just because we have difficulty in affording it. People can put up with a lot of hardship, and we do, when we are all being treated equally but in this republic of equal opportunities, people are not being treated equally.The individuals in question have done this country a great service and should not be punished any longer for doing so.

Damien English (Meath West, Fine Gael)
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I thank Senator James Reilly for raising this issue. The Minister, Deputy Regina Doherty, could not make it here today and sends her apologies. She has asked me to reply.

The State contributory pension is primarily for people with sustained contributions towards the social insurance fund, which is financed by PRSI on a pay-as-you-go basis. It rewards such contributions with greater entitlements and coverage for a range of benefits, including contributory pension entitlements. Entitlement is calculated according to a yearly average, whereby the total contributions paid or credited is divided by the number of years of one's working life. Since the contributory pension was introduced in 1961, the yearly average contributions test has been used in calculating the level of pension entitlement. The total contributions paid or credited is divided by the number of years of the working life from a person's entry into insurable employment up to the year prior to his or her reaching State pension age.

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 will qualify for a pension at 85% of the full rate. The purpose of this is to give higher pension entitlements to those who have made more sustained contributions.

The current rate bands applying to the State contributory pension were introduced from September 2012, replacing previous rates introduced in 2000. These rate bands more accurately reflect the social insurance contributions history of a person. Before the introduction of the current rate bands, a person reaching retirement age, having paid a yearly average of 47 contributions out of a maximum of 52, only qualified for the same rate of payment as someone with a yearly average of 20 contributions, regardless of his or her much more significant PRSI contributions record. A person with a maximum of 52 of contributions, paid every year of his or her working life, received a weekly State pension of only €4.50 more than someone with a yearly average of 20 PRSI contributions. This did not seem equitable, and the new bands were introduced to more closely reflect a person's contribution history. Reversing the rates of these bands to the same percentages as were in place between 2000 and 2012 would carry an estimated total cost of approximately €73 million extra in 2018, and this amount would increase by an additional €10 million to €12 million extra each year thereafter. This is a significant cost that, if provided for, would obviously impact on other areas or items of expenditure.

Even with the changes in 2012, the rate bands are still highly re-distributive. For example, someone with only a 40% social insurance record gets an entitlement at 85% of the maximum contributory rate. It is the experience of the system that where a person gets a reduced contributory pension, he or she may generally be paid a higher rate under another scheme unless he or she has significant personal means. For example, he or she may qualify for the non-contributory State pension at up to 95% of the maximum State contributory pension rate or may qualify for an increase for a qualified adult payment, which is up to 90% of the maximum contributory rate.

The term "marriage bar" describes 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. This practice was abolished in 1973 when Ireland joined the EEC. It is worth remembering that most public servants recruited prior to 1995 paid a reduced PRSI rate and so they are not generally entitled to the State pension. In such cases, the marriage bar would not be expected to have impacted on State pension entitlement, as they would not have qualified for that payment had they remained in public sector employment. As the "marriage bar" was a rule rather than a legal prohibition, married women affected by it could take up other employment, and in that way could have qualified for a State pension had they wished.

It is expected that the total-contribution approach, TCA, will replace the yearly average approach for new pensioners from 2020. The aim of this approach is to make the rate of contributory pension more closely match contributions made by a person. An important element in the final design of the scheme will be the position of women who have gaps in their contribution records as a result of caring duties. The Minister for Employment Affairs and Social Protection, Deputy Regina Doherty, intends to finalise a proposal on this before the end of the year and then engage in public consultation that will provide an opportunity for people to submit their views on it. The Minister understands the concerns of the Senator, and I am informed that she has asked her Department to prepare a report on the 2012 rate bands issue as soon as possible to determine what options may be available in dealing with the issues and the likely costs involved. The Minister will be bringing the report to the Government as soon as it is ready. I do not have any further news on the timeline for the Senator just yet.

James Reilly (Fine Gael)
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I thank the Minister of State for his response. I must emphasise that addressing this injustice - that is what it is - cannot be put on the long finger.Women need a strong signal from the Government that this matter will be addressed. We are all realistic and understand there are limits with the public finances. It is intolerable for women, however, that every time they collect their pension, they continue to be discriminated against. This is the most urgent issue. Will the Minister of State give a timeline on when this will be addressed? Will he outline a pathway, which could cover several budgets but certainly not more than two, to address those who are due back payments?

Damien English (Meath West, Fine Gael)
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I do not have timelines yet but when the memorandum goes to the Government, it will outline timelines and pathways to resolving this issue. While the majority of those affected are women, it must be remembered it affected men's contributions too.

I will relay the urgency of the matter to the Minister for Employment and Social Protection, Deputy Regina Doherty, as well as the Senator's concerns. It needs a speedy resolution.