Willie Penrose (Longford-Westmeath, Labour)
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577. To ask the Minister for Employment Affairs and Social Protection her plans to consider applying the homemaker’s scheme respectively in order to ensure equitable access to the State pension and thereby benefit older women that took career breaks prior to 1994; and if she will make a statement on the matter. [41583/17]

Regina Doherty (Meath East, Fine Gael)
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The homemaker’s scheme, which was introduced in 1994 and provides for periods since then, makes qualification easier for those who take time out of the workforce for caring duties. It does this by allowing gaps of up to 20 years spent caring for children under 12 years of age, or incapacitated people, to be disregarded when a person’s social insurance record is being averaged for pension purposes.

It is estimated that extending the period covered by this scheme to periods prior to its introduction in 1994 would cost some €290 million per year.

Where people do not qualify for a maximum-rate contributory pension in their own right, the social protection system provides alternative methods of supporting such pensioners in old age. Where their spouse has a contributory pension, they may qualify for an Increase for a Qualified Adult amounting up to 90% of a full rate pension, which by default is paid directly to them, and is subject to a personal means-test. Alternatively, they may qualify for a State Pension (non-contributory), based on their household means, amounting up to 95% of the maximum contributory pension rate. There are very significant income and capital disregards in the means tests for these payments, which result in the large majority of payees – most of whom are women – being paid at the maximum rate.

I hope this clarifies the matter for the Deputy.

Willie Penrose (Longford-Westmeath, Labour)
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578. To ask the Minister for Employment Affairs and Social Protection her plans to suspend the charges to contribution cards for receipt of a State pension in 2012 until the promised total contribution reward system has been gender proofed and introduced; and if she will make a statement on the matter. [41584/17]

Willie Penrose (Longford-Westmeath, Labour)
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579. To ask the Minister for Employment Affairs and Social Protection the amount of resources required to reverse to charges to the contribution cards for State pension in 2012 in cases in which increasing contributory thresholds impact disproportionately on women; and if she will make a statement on the matter. [41585/17]

Regina Doherty (Meath East, Fine Gael)
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I propose to take Questions Nos. 578 and 579 together.

Each year more people are living to pension age and living longer in retirement. As a result of this demographic change, the number of State pension recipients is increasing year on year. This has significant implications for the future costs of State pension provision, and demographic change alone is expected to increase spending on pensions by over €220 million this year, not including the impact of rate increases.

The current rate bands applying to the State pension (contributory) were introduced from September 2012, replacing previous rates introduced in 2000. These rate bands more accurately reflect the social insurance contributions history of a person.

It is estimated that to revert to the previous bands would result in an annual cost at least €60 million in 2018 and this annual cost would increase by an estimated €10 million each following year as a greater number of pensioners qualify under post-2012 rules, i.e., €70 million in 2019, etc. The main beneficiaries from such a decision would be better off pensioners who do not qualify for means-tested pension payments (most of which are at 95% the maximum rate of the contributory pension), and who did not make sufficient contributions into the Social Insurance Fund to qualify for a full rate or 98% rate contributory pension.

While some 60% of these are women, it would be of no benefit to the most vulnerable pensioners, notably widows and those in receipt of non-contributory pensions, a higher percentage of whom are women, and who would face reduced increases in the rate of their payments, if that level of funding was re-allocated to pay for reverting to the rate-bands in place from 2000-2012.

While I have no plans to make the changes suggested by the Deputy, the issue of homemakers and gender will be considered very carefully in the context of developing the Total Contributions Approach reform that I am planning.

I hope this clarifies the matter for the Deputy.

Willie Penrose (Longford-Westmeath, Labour)
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580. To ask the Minister for Employment Affairs and Social Protection her plans to repeal the homemaker’s disregard with credits with the credit applicable for up to ten years and applied retrospectively to 1973; if in that context, this credit could also act as a re-entry credit which would accommodate persons that wish to re-enter the workforce after a period spent caring can access to training, educational or employment supplements; and if she will make a statement on the matter. [41590/17]

Regina Doherty (Meath East, Fine Gael)
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The home-makers scheme makes qualification for a higher rate of 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 for periods 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, subject to the standard qualifying conditions for State pension contributory also being satisfied. This has the effect of increasing the yearly average of the pensioner, which is used to set the rate of their pension.

My Department has estimated that the annual cost of extending the Homemakers scheme to allow people to avail of the full 20 years currently allowed under the scheme, encompassing periods prior to 1994, could cost some €290m in 2017, and this figure would rise at a faster rate than the rate of the overall cost of State pensions. This is a very significant cost, and the main beneficiaries would be people who already have significant household means, and who do not therefore qualify for a means-tested payment.

Changing the Homemakers scheme from one of disregarded years under calculation of the SPC’s Yearly Average calculation, to one of reckonable credits for the purposes of use in qualifying for other schemes under my Department’s responsibility, would have to be considered in the context of the Budgetary process, the available resources, and the competing demands for funds in my Department.

I hope this clarifies the matter for the Deputy.