Joan Burton (Dublin West, Labour)
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Question 159: To ask the Minister for Social and Family Affairs if her attention has been drawn to the fact that some pensioners in receipt of the contributory State pension are in receipt of weekly payments of less than the amount of the non-contributory pension, as in the case of a person (details supplied) and for example those who have worked outside the Irish jurisdiction for a certain period of their working lives, even if they are in receipt of pension payments in respect of this period; if there are proposals to address this anomaly, particularly at an EU level; and the cost to the Exchequer on a full year basis of levelling these rates up to the non-contributory rate and the full contributory rate. [12415/09]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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In order to qualify for the maximum rate of the state pension (contributory) a person must, amongst other qualifying conditions, achieve a yearly average of at least 48 contributions paid or credited on his/her social insurance record. Reduced pensions are paid to those with yearly averages as low as 10 contributions and arrangements are also in place for the payment of pro-rata pensions to those with mixed rate insurance records or contributions from other EU member states or countries with which Ireland has a reciprocal agreement.

The person concerned has a pension of €82.70 per week which comprises a pro-rata pension of €75.00 per week plus a living alone increase of €7.70 per week. This pension was calculated by taking the total number of contributions (Irish and UK) the person had paid over her working life and applying the average contributions test to arrive at the rate which would be paid if all contributions had been paid under the Irish social insurance system. The actual rate to be paid is determined by the proportion of Irish full rate contributions in the overall record. This is similar to the arrangement that applies when calculating pensions due under bilateral social security agreements or other pro-rata pensions. The formula used ensures that people receive a pension which reflects the proportion of Irish contributions contained in their overall contribution record.

I understand that the person concerned also receives a contributory pension from the UK and that she does not wish to apply for the means-tested state pension (non-contributory) which is available to people who do not qualify for the contributory pension or who are on reduced rate contributory pensions.

The cost of raising all reduced rate contributory pension payments to t he maximum state pension (non-contributory) rate is €547 million in a full year. To increase reduced rate payments up to the state pension (contributory) rate would cost €632 million in a full year.