Michelle Mulherin (Mayo, Fine Gael)
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45. To ask the Minister for Social Protection if she will consider addressing the unfairness of the situation where a woman worked in the 1960s, before she had a family, left to raise her family, subsequently returned to work and now, when she comes to pension age, her reckonable contributions are taken as from the 1960s up to the present, which means her average contributions work out at very little per year, when spread over that period, and this results in her getting less of a State pension - contributory; and if she will make a statement on the matter. [17241/15]

Joan Burton (Dublin West, Labour)
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The State pension contributory 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. 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 are 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. Once over 16 years of age, the date a person enters into insurable employment is the date used for averaging purposes.

To qualify for a state pension (contributory) a person must -

- have at least 520 paid contributions, and

- satisfy a yearly average condition (a yearly average of 48 contributions paid or credited is required for a full rate State pension (contributory), and reduced rates of payment may be payable for pensioners with lower averages).

The homemaker's scheme was introduced in 1994 to make qualification for State pension contributory (SPC) 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 calculated for pension purposes. The effect of this is to reduce the number of years by which the person's contributions are divided, thereby increasing their yearly average, making it easier for them to qualify for a maximum rate SPC. However, it is important to note that the homemaker's scheme will not, of itself, qualify a person for a SPC. The standard qualifying conditions for the SPC must also be satisfied. These require a person to enter insurable employment at least ten years before pension age, pay a minimum of 520 contributions at the correct rate (credited contributions do not satisfy this condition) and achieve a yearly average of at least 10 contributions paid or credited on their record.

The Government has no plans to backdate this scheme prior to 1994 as it was previously estimated that this could cost up to approximately €160 million annually. In any event, under the current rules, the costs of the scheme are expected to increase in the coming years due to the increase in female employment rates since 1994.

For those with insufficient contributions to meet the requirements for a State pension (contributory), the State pension system provides alternative methods of support. If someone has been a carer for nearly all of their adult life and has paid little or no PRSI, they may qualify for a means tested State pension (non-contributory), the maximum personal rate for which is €219, which amounts to just over 95% of the maximum rate of the State pension (contributory). Alternatively, if their spouse or civil partner is in receipt of a State pension (contributory) they may instead qualify for an Increase for a Qualified Adult of up to €206.30, which is just under 90% of the maximum personal rate of the State pension (contributory).