Olivia Mitchell (Dublin South, Fine Gael)
Link to this: Individually | In context

Question 181: To ask the Minister for Social and Family Affairs the number of persons in employment that will be affected by the increase in the amount of full rate contributions required for a contributory State pension which commences on 6 April 2012; the number of persons who under current circumstances will be entitled to a full contributory State pension but will no longer qualify for it in each of the years 2012, 2013, 2014 and 2015; and if he will make a statement on the matter. [14134/10]

Éamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context

The social insurance system is one which delivers benefits to those who contribute, similar to any insurance-type system. A State pension is a very valuable asset and we must ensure that those who benefit from it have made a sustained and adequate contribution over the course of their working life.

The Final Report of the National Pensions Board, published in 1993, recommended that the number of paid contributions required to qualify for a contributory pension should be increased to 520 contributions. The necessary legislation to effect the recommendations of the National Pensions Board was contained in Section 12 of the Social Welfare Act 1997 (now incorporated in the Social Welfare Consolidation Act 2005) which provided for the implementation of the change in two stages, with the paid contribution requirement being standardised at 260 from 2002, rising to 520 from 2012. Details of the proposed increase in the paid contributions required have been included in the Department's standard information material on pensions for some years.

It is not possible to determine how many people would qualify for a full contributory state pension in the years in question in advance of pension claims actually being made. However, the Department has analysed the records of over 16,000 people who qualified for contributory pensions in 2009 to assess how many would not qualify under the new arrangements if implemented at that time. This analysis showed that just under 11 per cent would not have qualified.

In addition, a further analysis was carried out on a sample of 2,000 records of those due to reach state pension age in 2012. Approximately 13 per cent of people who would pass the first qualifying condition for a contributory pension today (i.e. have more than 260 paid contributions) would not qualify under the new requirement as they have less than 520 paid contributions. It should be noted that some of this group are still making paid contributions so that the eventual number of non-qualifiers may be lower. The Department is continuing to analyse the potential impact of this change in qualifying conditions.