John Brady (Wicklow, Sinn Fein)
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563. To ask the Minister for Social Protection the estimated full-year cost of restoring the State pension band rates to their pre -September 2012 position. [13858/17]

Leo Varadkar (Dublin West, Fine Gael)
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The overall concern in recent years has been to protect the value of weekly social welfare rates. Expenditure on pensions is approximately €7 billion per annum. Due to demographic changes, my Department's spending on older people is increasing year on year at an approximate rate of €1 billion every 5 years. Maintaining the rate of the State pension and other payments is critical in protecting people from poverty.

As provided for in Budget 2012, from September 2012, new rate bands for State pension (contributory) were introduced. These bands replaced the previous structure, introduced in 2000. They 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, subject to the safety nets in place for those with no other means.

Entitlement is banded based on the average yearly contributions made during a working life. Those with a yearly average of 48+ contributions receive a 100% pension, where, for example, those with only a yearly average of 20 contributions receive an 85% pension (not means-tested).

It is estimated that reverting the contributory pension rate bands, to the percentages effective from 2000-2012, would cost over €60 million next year, and this annual cost would rise at a rate of approximately €10 million per annum. If such a change was introduced, it would mainly benefit pensioners with additional income above the State pension, and not those solely dependent upon it. It would also significantly reduce the funds available for across-the-board pension increases, which were instead introduced in the 2016 and 2017 Budgets, and which benefit all pensioners, including those most at risk of poverty.

Reforms and increases in the pension age have safeguarded the pension system and its core rates, despite huge demographic pressures and the economic crisis. By achieving this, even in such difficult circumstances, the Government has shown its commitment to supporting older people, as evidenced by CSO figures which show pensioners far less likely to experience consistent poverty than the general population.

Where someone does not qualify for a full rate contributory pension 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.

- Widows generally qualify for a full-rate Widows Contributory Pension.

- Increases for Qualified Adults.

- Credits for periods of unemployment and illness.

For those with insufficient contributions to meet the requirements for a State pension (contributory), they may qualify for a means tested State pension (non-contributory), the maximum personal rate for which is €227 (over 95% of the maximum rate of the contributory pension).

I hope this clarifies the matter for the Deputy.