Paul Connaughton (Galway East, Fine Gael)
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153. To ask the Tánaiste and Minister for Social Protection if she is considering changing the contributory pension regime to ensure that persons who have worked for decades and made contributions over many years can access the full contributory pension rate; the mechanisms that are open to those not on a full contributory pension to have the decision reviewed or revisited; and if she will make a statement on the matter. [30631/15]

Joan Burton (Dublin West, Labour)
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The State pension contributory (SPC) 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 an individual can maximise their entitlement to an SPC, 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. Under this system, the rate of the SPC is related to the average contributions paid (or credited) over their working life. For example, someone with a yearly average of 52 contributions (i.e. 100%) would generally receive a full rate pension (personal rate €230.30), whereas someone with a yearly average of only 30 contributions paid or credited would have an entitlement, under the SPC, to a weekly personal rate of €207, which is 90% of the maximum rate. If such a pensioner was paid the same rate of contributory pension as someone who had paid into the social insurance system all their working life, it would mean there was no benefit derived from the much greater contribution made by that person. As it is, the benefit derived from paying PRSI is greater, in relative terms, for those with limited contribution records and who receive lower rate pensions, than it is for full-rate pensioners.

Where an older person qualifies for the reduced rate SPC of €207, but they do not have other income (such as a private pension), the State pension system provides alternative methods of support. In such cases they may qualify for a means tested State pension (non-contributory), the maximum personal rate of which is €219, which amounts to just over 95% of the maximum rate of the SPC.

If a person does not believe that my Department has calculated their pension entitlements correctly, they may request that the decision be reviewed in the first instance, or they may appeal it to the independent Social Welfare Appeals Office.