Olivia Mitchell (Dublin South, Fine Gael)
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Question 179: To ask the Minister for Social and Family Affairs the way the pension of a person (details supplied) in Dublin 14 will be calculated under the new national pensions framework in view of the fact that come retirement they will only have worked and contributed 28 years; if it will be calculated on a percentage basis, that is 93.33% being 28 as a percentage of 30; or if there is another method of calculating same; and if he will make a statement on the matter. [17067/10]

Éamon Ó Cuív (Galway West, Fianna Fail)
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The National Pensions Framework which was launched in March of this year provides for significant state pension reform. The framework includes a number of changes to the state pension, including how pension will be calculated in the future, to make it more transparent, simpler and more equitable for those reaching pension age. Currently 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 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 be satisfied.

Two significant changes to the qualification criteria for state pension will be implemented in 2012. The minimum number of paid contributions required for state pension (contributory) will increase from 260 to 520 and social insurance credits will be introduced for people who take time out of the workforce for caring duties.

From 2020 the level of pension paid will be based on the total number of social insurance contributions made by a person over his or her working life. A person will need to make contributions for 30 years to qualify for a maximum pension. Once a person has the minimum number of paid contributions required, he or she will accumulate 1/30th of a pension for each year of contributions up to a maximum 30 years. Upon introduction of the total contributions approach, the maximum number of credits that can be used for pension purposes will be set at 520, equivalent to 10 years. For those with contribution shortfalls at pension age, arrangements will be put in place to allow them to receive additional benefit at a later date if they continue to make paid contributions for pension purposes while remaining in work or self-employment. In addition, for those people who wish to postpone drawing down their state pension, arrangements will be put in place to enable them to receive an actuarially increased benefit when they decide to retire.

According to the Department's records, the person concerned will reach pension age of 66 in 2019 and her eligibility for contributory pension will be based on the current qualifying conditions, i.e. a system of averaging will be used to determine the level of pension payable. My Department is not in a position to forecast the level of pension to which a person may be entitled. This service was formerly available but was discontinued for a number of reasons. For example, it is not possible at a given point in time to indicate with certainty what a person's future entitlements might be. Entitlements obviously will depend on the accuracy of their record to date, future employment patterns and contributions made to the social insurance system up until retirement.

Details of the person's full history of individual social insurance contributions can be provided to her on request along with the booklet 'Working It Out', to assist her in assessing her possible pension entitlement. Alternatively, she may request her contribution record via the Department's website www.welfare.ie and her record will be issued in hard copy. However, the Department plans to implement secure online access for customers to their PRSI contributions record later this year which will allow them to view their contribution records on-screen. This service will enable them to establish their entitlement to a contributory-based pension using the guidelines and step-by-step calculator provided in the 'Working it Out' booklets, taking into consideration the combination of their contribution record at that point and their own projected work pattern prior to reaching pension age.