Maureen O'Sullivan (Dublin Central, Independent)
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54. To ask the Minister for Social Protection if persons who have worked up their contribution pensions over numerous years will be effected by the new pension system coming into effect; if she will confirm that workers who have built up their contributions that their pensions will be protected by the regulations in place when they commenced their contributions; and if she will make a statement on the matter. [47379/14]

Joan Burton (Dublin West, Labour)
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The State pension is a very valuable benefit and is the bedrock of the Irish pension system. Therefore, it is important to ensure that those qualifying have made a sustained contribution to the Social Insurance Fund over their working lives and the reform measures introduced to date go somewhat toward that goal. To ensure that the individual can maximise their entitlement to a State pension all contributions paid over their working life from when they first enter insurable employment until pension age is taken into account when assessing their entitlement and the level of that entitlement.

Since 1961, when contributory pensions were first introduced, the average contributions test has been used in calculating pension entitlement. Therefore, to qualify for a state pension a person must:

- have at least 520 paid contributions and

- satisfy a yearly average (a yearly average of 48 is required for a full rate pension).

There have been significant changes to the PRSI system over the years which have increased social insurance coverage to most classes of working people. Accordingly, 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 more closely reflect the rate of pension payment received. For example, in a model where 30 years contributions (1560) would qualify a person for a maximum State pension (contributory), a person could accumulate 1/30th of a pension for each year of contributions up to a maximum of 30/30ths, inclusive of a certain number of credits.

The proposed date for the introduction of a move to a total contributions approach is 2020, but this may be subject to change as it is a very significant reform with considerable legal, administrative and technical challenges to be overcome in its implementation.

It should be noted that the pension system has evolved over decades, largely to the benefit of pensioners, and that it has generally been the case that the system at retirement is the one used to calculate pension rates, rather than the rules that pertained when they commenced employment. Accordingly, while it isn’t possible to be definitive about the potential impact of changes on individuals, I can assure the Deputy that contributions paid and credited under existing rules will continue to be used as part of the calculations in a new approach.