Robert Troy (Longford-Westmeath, Fianna Fail)
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666. To ask the Minister for Employment Affairs and Social Protection her plans to alter the State pension qualification criteria to ensure that all persons that have had periods outside of the PAYE system or who have been a home maker for a period of time are entitled to a full State pension; her views on whether the situation whereby many persons have lost their entitlement to a full pension due to changes made in 2012 is unacceptable; and if she will make a statement on the matter. [50444/17]

Regina Doherty (Meath East, Fine Gael)
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The changes made to State Pension (contributory) rate bands made in budget 2012, affected those pensioners who had a yearly average of less than 39 social insurance contributions over the course of their working life. As such, the changes did not preclude any pensioner who would have qualified for a full State Pension (contributory) pre-2012 from qualifying for a full rate after September 2012.

The current rate bands 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 both 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 better than proportionate with their level of contribution. A person with only 20 years of contributions over nearly 50 years will still get an 85% pension, which compares favourably with contributory pensions in other EEU countries.

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 to €12 million extra each following year. Awarding a maximum rate contributory pension to everyone who had spent time outside the PAYE system, regardless of their means, would be even more expensive and it is estimated this would cost well over €1 billion per annum.

My Department is examining in depth various options that would provide some relief to those who would have a higher contributory pension, had the rate-bands not been amended in 2012. If there are equitable changes that target such relief to those who were affected by the yearly average system, particularly those who had homemaking periods prior to the introduction of the Homemakers scheme, I will ask Government to consider if and how these might be financed.

It is intended to introduce a total contributions approach for new pensioners from 2020. This will make the rate of contributory pension more closely match contributions made by a person. It will also have significant homemakers provisions that will assist those pensioners who spent significant periods caring for their children, or adults with a caring need.

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.