Written answers

Tuesday, 13 May 2008

Department of Social and Family Affairs

Pension Provisions

9:00 pm

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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Question 324: To ask the Minister for Social and Family Affairs the progress made in regard to the commitment given in the Programme for Government to ensure women are treated fairly in pension provision. [18582/08]

Photo of Bernard DurkanBernard Durkan (Kildare North, Fine Gael)
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Question 337: To ask the Minister for Social and Family Affairs if consideration will be given to allowing social welfare contribution credits in cases where one parent takes time off from work during the children's formative years; and if she will make a statement on the matter. [18671/08]

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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I propose to take Questions Nos. 324 and 337 together.

The social welfare pension rights of those who take time out of the workforce for caring duties are protected by the Homemaker's scheme which was introduced in and took effect from 1994. The scheme allows up to 20 years spent caring for children or incapacitated adults to be disregarded when a person's social insurance record is being averaged for pension purposes. However, the scheme will not of itself qualify a person for a pension.

The standard qualifying conditions, which require a person to enter insurance 10 years before pension age, pay a minimum of 260 contributions at the correct rate and achieve a yearly average of at least 10 contributions on their record from the time they enter insurance until they reach pension age, must also be satisfied. These conditions are designed to ensure that those qualifying for pensions have had an adequate and sustained commitment to the social insurance system as well as to uphold the contributory principle that underpins the qualifying conditions for all social insurance payments.

The operation of the homemakers scheme is subject to review in the context of the Green Paper on Pensions, with particular regard being paid to the operative date of the scheme and the use of credits for pension purposes rather than the current system of disregards.

A consultation process on the Green Paper is now underway and will remain open until 31 May 2008. Once the consultation process is completed, work on developing the framework for future policy will commence, and I expect to have the framework completed by the end of 2008.

It should also be noted that people of working age who are no longer liable for PRSI contributions may opt to protect their pension entitlements by applying to become a voluntary contributor. In order to be admitted to the voluntary contributions scheme, a person must have a minimum of 260 weeks of PRSI paid in either employment or self-employment and apply within 12 months of the end of the tax year during which they last paid PRSI or had a PRSI credited contribution. The requirement to have 260 paid contributions to gain access to the scheme is essential in that it ensures that the requisite minimum number of paid contributions required is in place to establish a contributory pension entitlement.

Improvements in the area of qualified adult payments are also helping to improve the pension position of women. A qualified adult increase is payable in respect of a spouse or partner who is wholly or mainly maintained by a claimant. Since 2002, pensioner couples can opt for a payment to be made to a spouse or partner by requesting that the qualified adult portion of the pension be paid direct to the spouse or partner. Many spouse partners without their own pension entitlement have received a direct payment in this way.

These arrangements were further enhanced from the 24th September 2007 when direct payment of the qualified adult allowance was made mandatory in respect of all new pension claims. Couples may opt to receive a single payment but only where the qualified adult indicates that she/he does not wish to receive a direct payment. The Government has committed itself to complete the process, begun in Budget 2007, to bring payments to qualified adults up to the level of the State pension (non-contributory) over a period of three years. In Budget 2008, an increase of up to €27 per week in the qualified adult rate was granted where the qualified adult is aged 66 or over. This brings the maximum rate to €200 per week which represents 94% of the target. It is my intention to complete the process of aligning the rates in question.

The Programme for Government also includes a commitment to extend payment of the over 80 allowance to qualified adults, which will benefit some 4,500 people who are receiving support as qualified adults on the pension of their spouse or partner and improvements in this regard will be considered in a Budgetary context. Further reforms and improvements will be considered in the context of the Green Paper on Pensions and the framework for future pensions policy which will follow later this year.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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Question 325: To ask the Minister for Social and Family Affairs the progress made in regard to the commitment given in the Programme for Government to introduce phased retirement which allows workers a greater say in their retirement age. [18583/08]

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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Question 327: To ask the Minister for Social and Family Affairs the progress made in regard to the commitment given in the Programme for Government to guard against age-related discrimination in the workplace. [18585/08]

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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I propose to take Questions Nos. 325 and 327 together.

It important that those who wish to continue in employment after normal retirement age should, as far as is possible, be facilitated and supported. Longer working can play an important role in ensuring that our pensions system is sustainable in the future and can be beneficial to the individual. The Green Paper on pensions includes an examination of the issues surrounding retirement age and the barriers faced by older workers who wish to remain in employment.

In the context of the Green Paper on pensions and the Agreed Programme for Government, I will be seeking to introduce flexibilities into the social welfare pensions and social insurance systems to encourage and facilitate longer working. However, changes to social welfare pensions represent only one aspect of the responses which will be needed in this area. In order for changes in the pensions area to have an impact we require a change in attitudes in relation to longer working from both employers and employees. At the workplace level employers must seek to retain older employees and create the working conditions which will make longer working both attractive and feasible for older workers.

These issues, together with the questions of allowing employees choices in relation to the age at which they retire, and issues of age discrimination in the workplace, are matters for my colleague the Tánaiste and Minister for Enterprise, Trade and Employment.

Photo of Róisín ShortallRóisín Shortall (Dublin North West, Labour)
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Question 326: To ask the Minister for Social and Family Affairs the progress made in regard to the commitment given in the Programme for Government to extend the amount persons in receipt of the State non-contributory pension are allowed to earn. [18584/08]

Photo of Mary HanafinMary Hanafin (Dún Laoghaire, Fianna Fail)
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An earnings disregard of €100 per week was introduced in September 2006 where the non-contributory pensioner and/or spouse or partner is in employment. The disregard was intended as an incentive to facilitate non-contributory pensioners who wish to continue working, or to re-enter the workforce. In line with the commitment in the Programme for Government the disregard was increased to €200 per week with effect from January 2007. Any further improvements will have to be considered in a Budgetary context, having regard to available resources and other measures for pensioners.

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