Willie O'Dea (Limerick City, Fianna Fail)
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364. To ask the Minister for Social Protection the implications for persons who take time out of the workforce to undertake caring duties of the plan to move to a total-contributions approach to pension qualification from the current average contributions test for State pension, contributory, by 2020; and if she will make a statement on the matter. [19302/14]

Joan Burton (Dublin West, Labour)
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The rate of State pension (contributory) a person qualifies for on reaching the age of 66 depends upon, among other conditions, the average number of contributions paid or credited each year, from the time they enter insurable employment.

The homemaker’s scheme was introduced in 1994 to make qualification for State pension (contributory) easier for those who take time out of the workforce for caring duties. The scheme allows up to 20 years spent caring for children under 12 years of age or incapacitated people to be disregarded when a person’s social insurance record is being averaged for pension purposes.

To be eligible for the homemaker’s scheme, a person must:

- Permanently live in the State (exception may be made where EU regulations apply),

- Be aged under 66,

- Have started insurable employment or self-employment before the age of 56,

- Not work full-time, although for the purposes of this scheme, a person can work and earn less than €38 gross per week,

- Care for a child (under 12) or an incapacitated person on a full-time basis.

However, it is important to note that the scheme will not, of itself, qualify a person for a pension. The standard qualifying conditions, which require a person to enter insurance ten years before pension age, pay a minimum of 520 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 also be satisfied. For those who do not satisfy these conditions, and have an income need, a means-tested State pension may be available.

Under the pension reform programme, it is planned to adopt a total contributions approach where the number of contributions paid over a work life will closely reflect the rate of payment received. This approach was endorsed by the OECD Review of the Irish Pension System, which was published in April 2013. It has been planned to introduce this change in 2020, although this date may change.

There are a number of issues which will be considered before the total contributions approach is introduced, and the issue of workers, mostly women, who spend a number of years out of the labour market caring for children and/or incapacitated people is one which will be addressed in the context of this reform.