Written answers

Wednesday, 24 January 2018

Department of Employment Affairs and Social Protection

State Pension (Contributory)

Photo of Catherine MurphyCatherine Murphy (Kildare North, Social Democrats)
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171. To ask the Minister for Employment Affairs and Social Protection her plans to reverse the 2012 changes to the State pension (contributory); and if she will make a statement on the matter. [3551/18]

Photo of Regina DohertyRegina Doherty (Meath East, Fine Gael)
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On the 23rdJanuary, the Government agreed to a proposal that will allow pensioners affected by the 2012 changes in rate bands to have their pension entitlement calculated by a new “Total Contributions Approach” (TCA) which will include up to 20 years of a new HomeCaring credit. This approach is expected to significantly benefit many people, particularly women, whose work history includes an extended period of time outside the paid workplace, while raising families or in a caring role. It will make it easier for pensioners assessed under the yearly average model, to qualify for a higher rate of the State Pension (contributory). The TCA will ensure that the totality of a person’s social insurance contributions - as opposed to the timing of them - determines a final pension outcome.

The new TCA with substantial HomeCaring credits will be available to all people who reached pension age after 1st September 2012, when the revised rate bands took effect.

Under the new arrangements a person who has a 40 year record of paid and credited social insurance contributions, subject to a maximum of 20 years of the new HomeCaring credits, will qualify for a maximum contributory pension where they satisfy the other qualifying conditions for the scheme.

The new TCA for pensioners assessed under the 2012 rate band changes, comes into effect from the 30th March 2018. The Department will invite over 40,000 pensioners, currently assessed under the 2012 rate band changes, to have their pensions recalculated under TCA to determine if they qualify for a higher rate of entitlement. However, as it will take time to design and set up administrative processes, and the necessary IT systems, the Department expects to send out the invitations from Q4 2018 and to begin payments, including arrears for any period from 30thMarch 2018, from Q1 2019.

I hope this clarifies the matter for the Deputy.


Monica Condron
Posted on 25 Jan 2018 6:33 pm (Report this comment)

Why is the Total Contributions Approach being assessed over 40 years. Why not one of the 30 or 35 year's contribution options as in the Actuarial Review of Social Insurance Funds 2015 published in Sept 2017. The minister cannot be suggesting that when the real total contributions system is introduced in 2020 that it will be assessed over 40 years. Besides being political suicide it is also grossly unfair to those who are due to retire in the early 2020s.

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