Robert Troy (Longford-Westmeath, Fianna Fail)
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98. To ask the Minister for Social Protection if she will outline the pension rights for a person who started work in 1967 and will be 66 years old in July 207, with the new changes introduced will they only receive €207 per week due to the pension being calculated on 50 years working life; her views on whether the average number of years required to work to receive a full pension is 40 throughout Europe, this person currently has more than 1,600 contributions here but because it is calculated on 50 years they lose a lot of money; and if she will make a statement on the matter. [19504/13]

Joan Burton (Dublin West, Labour)
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In order to qualify for a State pension contributory, a person must satisfy a number of qualifying conditions which include; commencing insurable employment at least 10 years before pension age, payment of a minimum of 520 qualifying contributions and achieving a yearly average of at least 10 qualifying contributions, paid or credited, over their working life.

Qualification for a pension is calculated on an averaging system based on the PRSI contributions paid over a working life. The individual’s yearly average number of contributions determines the amount of pension paid. This is generally calculated from the date on which paid employment commenced to pension age, therefore it is varies depending on each individual’s working life. Time taken out of the paid workforce may result in gaps in contribution records, which may result in a lower rate of pension being paid.

The average contributions test has been in existence since 1961 and was designed with a view to ensuring that people could move in and out of PRSI coverage. A move away from the averaging system to a total contributions system is planned. This will mean that the total number of years contributions paid will be considered when assessing entitlement to a pension. The level of pension paid will then be directly proportionate to the number of social insurance contributions made by a person over his or her working life. The proposed change is supported in the OECD Review of the Irish Pension System launched on the 22 April 2013.

The State pension is a very valuable asset and it is important, for sustainability reasons that those who receive it have made a significant contribution towards it during a working life.