Tommy Broughan (Dublin Bay North, Independent)
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53. To ask the Minister for Employment Affairs and Social Protection when the PRSI contribution bands changes made in budget 2012 for the pension will be changed back to the previous four bands; when refunds will be provided to the tens of thousands of pensioners that have been adversely affected; and if she will make a statement on the matter. [50467/17]

Mary Butler (Waterford, Fianna Fail)
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66. To ask the Minister for Employment Affairs and Social Protection the way in which she plans to address the shortfall in pension payments for persons retiring since 2012 in view of the inequality between persons retiring pre and post 2012; and if she will make a statement on the matter. [50505/17]

John Brady (Wicklow, Sinn Fein)
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76. To ask the Minister for Employment Affairs and Social Protection when action will be taken to reverse the 2012 pension bands and rates changes which resulted in reduced State pension payments for over 42,000 persons; and if she will make a statement on the matter. [50580/17]

Regina Doherty (Meath East, Fine Gael)
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I propose to take Questions Nos. 53, 66 and 76 together.

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 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.

On the matter of differing criteria for people who retired before and after this change was made, this is the norm, both in Ireland and in other countries, when pension systems are reformed in a way to make them more sustainable. If it were not the case, either (a) existing pensioners would be subject to actual reductions in their incomes, in some cases several years after reaching pension age, or (b) no reforms which made savings could ever be made, as people would always be subject to the rules in place when older pensioners had reached pension age.

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.

My Department is examining in depth various options that would provide some relief to those who would have a higher contributory pension, had the ratebands 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 present the possible solution(s) to cabinet committee to consider how these might be financed and thereafter I will bring to Government for approval.

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 Deputies.