Clare Daly (Dublin Fingal, Independent)
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274. To ask the Minister for Social Protection further to Parliamentary Question No. 9 of 30 September 2015, if he will take steps to address the anomaly in how PRSI contributions are calculated for pension purposes in order to correct the anomaly that in some cases women who were subject to the marriage bar and who worked thereafter, are not entitled to a full contributory pension and are worse off than if they had not worked at all prior to the lifting of the marriage bar. [16677/16]

Leo Varadkar (Dublin West, Fine Gael)
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The ‘marriage bar’ describes a rule that existed in most of the public service and some private sector employments, where women were required to leave their employment upon marriage. This practice was abolished in 1973 when Ireland joined the EEC. As employees in the public service generally paid a reduced rate of PRSI, which provided no cover for the State pension (contributory), the marriage bar would not generally have impacted on State pension entitlement, as they would not have qualified for that payment had they remained in public sector employment.

Instead, by impacting upon their continuing public service employment, the marriage bar’s pension implications, where they exist, more generally relate to a person’s eventual entitlement to a Public Service pension. Any questions regarding this issue are a matter for the Minister for Public Expenditure and Reform.

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). Once over 16 years of age, the date a person enters into insurable employment is the date used for averaging purposes.

For those who have insufficient contributions to qualify for a full State pension (contributory), there are supports available in the overall State pension system which assists qualification for a contributory payment, based on factors such as the contributions made by their spouse, and/or other factors likely to impact upon their needs. These include –

- The Homemaker’s scheme, which was introduced to make qualification for State pension (contributory) easier for those who take time out of the workforce for caring duties.

- Increases for Qualified Adults.

- Credits for periods of unemployment and illness .

- For those who do not qualify for a full rate contributory pension, they may qualify for a means-tested non-contributory pension of up to 95% of the full contributory pension.

The most recently published Actuarial Review of the Social Insurance Fund confirms that the Fund provides better value to female rather than male contributors. It further confirms that those with lower earnings and those with shorter contribution histories, mostly women, have and will continue to obtain the best value for money from the Fund due to the distributive nature of the Fund.

It is expected that a total contributions approach to pension qualification will replace the yearly average contributions test for State pension (contributory) for new pensioners from 2020. The aim of this approach is to make the rate of contributory pension more closely match contributions made by a person, while dealing with anomalies inherent in the yearly average approach. This is a very significant reform with considerable legal, administrative, and technical elements in its implementation. When proposals are agreed, legislation will be brought forward to underpin the necessary changes. It is important that the changes be announced well in advance of introduction, to enable those affected to include the new factors into their retirement planning.