Niamh Smyth (Cavan-Monaghan, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

15. To ask the Minister for Employment Affairs and Social Protection the status of plans to reform the pension system which currently discriminates against persons, mainly women, that took time out of the workforce prior to 1994 to care for children or elderly relatives; and if she will make a statement on the matter. [1879/18]

Regina Doherty (Meath East, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The State pension contributory is paid from the Social Insurance Fund. Accordingly, it is important to ensure those qualifying for that pension have made a sustained contribution to the Social Insurance Fund over their working lives. To ensure that the individual can maximise their entitlement, all contributions, paid or credited, over their working life from when they first enter insurable employment until pension age are taken into account.

The homemaker's 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 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.

Where someone does not qualify for a full rate contributory pension, they may qualify for another payment. If 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. Alternatively, they may qualify for a means-tested State pension non-contributory, which amounts up to 95% of the maximum contributory rate.

Due to the redistributive nature of the Social Insurance Fund, women generally get more back from their PRSI contributions than men on an actuarial basis, particularly those with lower earnings and shorter contribution years.

I plan to introduce a total contributions approach to the calculation of the State Pension (Contributory) to replace the yearly average approach from around 2020. The position of homemakers will be carefully considered in the context of that reform.

I hope this clarifies the matter for the Deputy.