Tommy Broughan (Dublin North East, Independent)
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253. To ask the Tánaiste and Minister for Social Protection her plans to ensure that women who spent a lengthy period of time on home duties, and subsequently worked for up to 25 years and paid social insurance, will be afforded an opportunity to obtain a State pension (contributory), which will fully recognise their work in the home; and if she will make a statement on the matter. [38164/15]

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 or credited 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 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 makes qualification for State pension (contributory) easier for those who take time out of the workforce for caring duties. The scheme, which was introduced in and took effect from 1994, allows up to 20 years spent caring for children under 12 years of age (or caring for incapacitated people over that age) to be disregarded when a person’s social insurance record is being averaged for pension purposes. 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 rate of pension a person with 25 years of paid contributions will qualify for will vary depending on their circumstances, most notably the duration of their working life, whether they have credited contributions in respect of periods they were in receipt of social welfare payments, and whether they have periods under the homemaker's scheme.

For those with insufficient contributions to meet the requirements for a State pension (contributory), the State pension system provides alternative methods of support. Where someone over 66 does not qualify for a full rate contributory pension, they may apply for a non-contributory pension, which is based on need and is means tested. Currently the maximum rate of this pension is €219 weekly, which is 95% of the maximum rate of the contributory pension. Where it is more beneficial for the claimant, they may instead seek an Increase for Qualified Adult payment, on their spouse’s State pension contributory, currently the maximum rate of which is €206.30, which is 90% of the maximum personal rate. This increase is, by default, paid directly to the Qualified Adult.

Work is underway to replace the ‘yearly average’ system with a ‘total contributions approach’. Under this approach, the number of contributions recorded over a working life will be more closely reflected in the rate of pension payment received. It is expected that the total contributions approach to pension qualification will replace the current average contributions test for State pension (contributory) for new pensioners from 2020, although that date is subject to change, as this is a very significant reform with considerable legal, administrative, and technical challenges to be overcome in its implementation.The position of women who were homemakers will be considered very carefully in developing this reform.