Tommy Broughan (Dublin Bay North, Independent)
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60. To ask the Minister for Social Protection if a percentage of the €400 million surplus in the social insurance fund will be used to backdate pension payments to the 43,000 pensioners receiving lower pensions since the PRSI band changes announced in budget 2012; and if he will make a statement on the matter. [10492/17]

Leo Varadkar (Dublin West, Fine Gael)
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The social insurance fund (SIF) had a surplus of €453 million in 2016.

It should be noted that as a result of demographic pressures, expenditure on pensions increases by approximately €1 billion every five years, and this is without taking account of any rate increases. An Actuarial Review of the Social Insurance Fund is currently being carried out, which will assess the financial "health" of the Fund in the coming years, and this will inform decisions on expenditure relating to the Fund. It should be remembered that the fund does not just finance pensions, but also includes a range of payments for people of working age.

The current rate bands for State pension (contributory) were introduced from September 2012, replacing the previous bands which had been in place since 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.

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.

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.