Willie O'Dea (Limerick City, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

611. To ask the Minister for Employment Affairs and Social Protection the number of persons negatively affected by changes introduced to the contributory pension in 2012; the number of persons expected to benefit from the new total contributions approach and home caring credit; the number expected to benefit by gender; and if she will make a statement on the matter. [4454/18]

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

There were 46,677 people affected by the rate band changes in September 2012. It is estimated that two-thirds of these will see their rate of payment increased by the Total Contributions Approach (TCA) introduced on 23 January. The precise number cannot be known at this time as there may be inflows from other schemes, such as the State Pension (non-contributory). Equally, it is not possible at this juncture to give a gender breakdown of the likely beneficiaries.

In the main, people with home-making/caring periods pre-1994 (not covered by the current home-makers scheme) are expected to gain the most from the introduction of the HomeCaring Credits with TCA. There will also be some people with 40 years contributions (or slightly less) with big gaps in their records, who may expect an increase in their payment.

Those who are less likely to benefit from the TCA model are people with lower numbers of paid social insurance contributions, who have no significant home-making/caring periods. However, it should be understood that no-one will have a reduced rate of payment as a result of this announcement. Anyone who is not better off as a result of this proposal will remain on their existing rate of payment.

I hope this clarifies the matter for the Deputy.

Willie O'Dea (Limerick City, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

612. To ask the Minister for Employment Affairs and Social Protection the estimated full-year cost of the new total contributions approach and home caring credit; and if she will make a statement on the matter. [4455/18]

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

On 23 January, 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.

The cost of introducing this measure is estimated to be in the region of €40 million per annum, which does not include inflows from other schemes. This cost is based on estimated levels of take up of HomeCaring Credits among women and men, which will only be clear when claims have been made and processed. Inflows from other schemes cannot be estimated, e.g. those people on a State pension (non-contributory) who may now have a higher entitlement under the State pension (contributory).

I hope this clarifies the matter for the Deputy.

Willie O'Dea (Limerick City, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

613. To ask the Minister for Employment Affairs and Social Protection if the total contributions approach that is due to come into effect for all pensioners in 2020 will be modelled differently from the one announced for the 2012 pension anomalies; if this will affect those who will be able to avail of the new total contributions approach as a result of the 2012 anomalies; and if she will make a statement on the matter. [4456/18]

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

On 23 January, 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 such pensioners 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.

Officials in the Department have been working on the introduction of a Total Contributions Approach since 2015. The recent Actuarial Review of the Social Insurance Fund has been used to explore the costs of various options and to inform the design of the Total Contributions Approach.

This Review was recently completed and published, and the costings produced are being considered, with a view to progressing to the next stage, which will include a consultation process. The final structure of the model, which will include the number of years required for a maximum rate of pension, and the treatment of credited contributions and home-making periods, will be submitted to Government later this year, following that consultation process.

Subsequent to this, legislative proposals will be introduced to the Oireachtas.

This is a very significant reform with considerable legal, administrative, and technical components to be put in place prior its implementation.

It is intended that the arrangements in place from 2020 will apply only to new pensioners from that date.

I hope this clarifies the matter for the Deputy.