Róisín Shortall (Dublin North West, Independent)
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178. To ask the Minister for Social Protection the savings and costs to the Exchequer in 2013 and 2014, and in 2015 to date, arising from the changes to the banding system of the State Pension (Contributory) in 2012. [21471/15]

Joan Burton (Dublin West, Labour)
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The State pension (contributory) is a very valuable benefit. Therefore, with the challenges facing the pension system given increased number of older people living longer, it is important to ensure that those qualifying for State pension (contributory) have made a sustained contribution to the Social Insurance Fund over their working lives. As provided for in Budget 2012, from September 2012, new rate bands for State pension (contributory) were introduced. 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 lesser contributions. This is a step towards a total contributions approach by aligning the rate of pension payment more closely to the number of contributions paid over a working life.

A number of people, who would otherwise qualify for a lower rate of payment of State pension (contributory) as a result of this reform, will instead qualify for a higher rate of State pension (non-contributory), the maximum rate of which is €219. It is not possible, therefore, to state with certainty the actual net savings made as a result of this reform. The savings expected to be achieved from this measure are as follows: €0.5 million in 2012, €2.8 million in 2013, €5.5 million in 2014 and €8.2 million in 2015, and it is expected that this will increase over time, as the provisions are applied to new pensioners entering the system.