Clare Daly (Dublin Fingal, Independent)
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29. To ask the Minister for Employment Affairs and Social Protection her views on the discriminatory nature of the eligibility rules for obtaining a State pension (contributory) and its affect in disadvantaging women that in the past chose to take time out of the jobs market in order to raise families. [1910/18]

Alan Farrell (Dublin Fingal, Fine Gael)
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39. To ask the Minister for Employment Affairs and Social Protection the action being taken to provide pension equality for those that were historically penalised for being stay at home parents; and if she will make a statement on the matter. [1986/18]

Regina Doherty (Meath East, Fine Gael)
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I propose to take Questions Nos. 29 and 39 together.

There are three main State pensions. First, the State pension non-contributory is a means-tested pension funded from taxation. Second, the State pension contributory, which is not means-tested, is paid from the Social Insurance Fund, and is funded via the PRSI system. The third main state pension available to some people over 66 is the Widows/Widowers Contributory Pension.

It is important to ensure those qualifying for the contributory pension have made a sustained contribution to the Social Insurance Fund over their working lives. Such contributory pensions, with rates of payment linked to contributions made into a fund, are the norm internationally.

To ensure that people can maximise their entitlement to a State pension, all contributions, paid or credited, over their working life from when they first enter insurable employment until pension age are taken into account when assessing their entitlement and the level of that entitlement.

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 for periods 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. This has the effect of increasing the yearly average of the pensioner, which is used to set the rate of his or her pension.

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

When all payments across the State pension system are taken into account, the difference in the average direct payment to men and women is approximately 1% in Ireland. This would be very low by European standards, and as a result CSO figures show that poverty levels among those over 66 are very low for both men and women, and are at parity. In the latest figures, the rate of Consistent Poverty for men over 66 was 1.79% for men and 1.36% for women, compared to 8.3% for the general population.

Later this year, I plan to propose legislation to introduce a total contributions approach to the calculation of the State Pension (Contributory), replacing the current yearly average approach. The position of homemakers will be carefully considered in the context of that reform.

Finally, last year I instructed my Department officials to undertake an in-depth examination of 2012 changes to the rate bands of the State Pension (contributory), with a view to identifying equitable options for reliefs where a person's PRSI gap resulted from a period of caring for children or older people, or for those with homemaking periods prior to the introduction of the Homemaker’s scheme in 1994. I am pleased to say, that this work has been completed. Later this week I will bring this report to a Cabinet Committee for discussion, with a view to bringing a proposal to Cabinet in the near future.

I hope this clarifies the matter for the Deputies.