Michael Moynihan (Cork North West, Fianna Fail)
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392. To ask the Minister for Social Protection her plans to change the eligibility for the contributory State pension arising from budget 2012; and if she will make a statement on the matter. [40855/13]

Joan Burton (Dublin West, Labour)
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The State pension is a very valuable asset and it is important, with increases in the numbers of older people and increased longevity, that those who receive it have made a significant contribution towards it during a working life, as the State needs to ensure that it can continue to sustain pension payments in the future. People need to participate in the workforce for longer and need to contribute more towards their pensions over a working life. Budget 2012 provided for additional rate bands payable for State pension. These were introduced in September 2012. These additional payment rate bands more accurately reflect the social insurance history of a person and ensure that those who contribute more during a working life benefit more in retirement than those with fewer contributions.

This measure is part of a package of reform measures to State pension including:

- increase to State pension age, introduced in 2011, which will be implemented in three separate stages: in 2014, State pension age will be standardised at 66; increased to 67 in 2021; and to 68 in 2028. This will see the abolition of the State pension transition payment from 2014;

- increase in the number of paid contributions required to qualify for a State pension. With effect from April 2012, this increased from 260 paid contributions to 520 paid contributions.

In terms of future reform, it is planned to introduce a ‘total contributions approach’ where pension payment made will more closely reflect contributions made over a working life. This will replace the averaging system currently in place. The Actuarial Review of the Social Insurance Fund, published in September 2012, shows that social insurance offer excellent value for money. Notwithstanding the recent changes over the last number of years, those with lower earnings and those with shorter contributions histories will continue to obtain the best value for money from the Fund.

The State pension is the bedrock of the Irish pension system and reforms such as these are essential to address the challenges of increasing life expectancy and to ensure its sustainability. The recently published OECD report on the Review of the Irish Pension System confirms that reforms are necessary if we are to continue to put pension provision on a sustainable footing. There are no plans to change the reform measures introduced to State pension including those introduced in Budget 2012.