Willie O'Dea (Limerick City, Fianna Fail)
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517. To ask the Minister for Employment Affairs and Social Protection the full-year cost of reversing the changes made in 2012 to the bands for the contributory pension; and if she will make a statement on the matter. [51217/17]

Regina Doherty (Meath East, Fine Gael)
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The changes made to State Pension (contributory) rate bands 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 EU 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.

I hope this clarifies the matter for the Deputy.