John Curran (Dublin Mid West, Fianna Fail)
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1272. To ask the Minister for Employment Affairs and Social Protection when she expects to make changes to the contributory State pension which will address the negative discrimination being endured by pensioners as a result of the changes made in 2012; and if she will make a statement on the matter. [46985/17]

Regina Doherty (Meath East, Fine Gael)
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The current rate bands applying to the State pension contributory were introduced from September 2012, replacing previous rates introduced in 2000. The rate bands prior to 2000 were less generous, and the improved rate bands introduced in 2000 were a feature of the economic and political environment at that time. The economic crash changed the focus and while other payments were reduced as a result, the core rates of the pension, which many pensioners were solely dependent on, were maintained. Instead, the rates for people who had additional means and lesser PRSI contribution records were reduced.

The 2012 rate bands more closely reflect the social insurance contributions history of a person than those in place between 2000 and 2012. The current rate bands still provide pensions to people which are not proportionate with their level of contribution. A person with only 20 years of contributions over nearly 50 years will still get an 85% pension. Had all pensions been cut, regardless of means and contribution records, the hardest hit would have been pensioners with no additional incomes, those paid a State pension non-contributory, and widows and widowers living alone on only one pension payment.

People on the lower rate bands with other income, which meant they did not qualify for a non-contributory pension which is paid at a rate of over 95% of the contributory pension, are generally in a better financial position than those solely dependent on the non-contributory pension, as otherwise they could claim that payment instead. Changing these bands would give additional money to people who already have means. It is estimated that to revert to the previous bands from January 2018 would result in an annual cost of well over €70 million in 2018, and this annual cost would increase by an estimated €10-12 million each following year.

My Department is examining in depth whether the 2012 rate band changes have impacted disproportionately or unfairly on specific groups in relation to the contributions they have made for the pensions they receive. If that is the case, measures to alleviate that impact on people who, as a result of homemaking duties, have reduced pension entitlements following the 2012 changes, would be considered. Such measures should be more targeted than a simple reversion to the previous rate bands, which would benefit many people with significant additional means, and who in many cases, despite making limited PRSI contributions over the years, were not involved in homemaking.

It is intended to introduce a total contributions approach for new pensioners from around 2020. This will make the rate of contributory pension more closely match contributions made by a person. A consultation is planned on this reform, which would provide an opportunity for people to submit their views on what they want to see in this reform.

The main aim of Government policy on pensions is to make sure that pensions are affordable, sustainable and keep their value in the coming years. The reforms that are planned will result in a more inclusive and fairer pension system for all citizens.

I hope this clarifies the matter for the Deputy.