Kevin O'Keeffe (Cork East, Fianna Fail)
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521. To ask the Minister for Employment Affairs and Social Protection the position regarding proposals to resolve the anomaly for women who are receiving a reduced State pension, contributory, owing to a change in 2012 in the pay-related social insurance, PRSI, calculation method in circumstances in which these women took time out of work to rear their children. [29140/18]

Regina Doherty (Meath East, Fine Gael)
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On the 23rd 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 under a total contributions approach which will include up to 20 years of a new HomeCaring credit.

The TCA will ensure that the totality of a person’s social insurance contributions - as opposed to the timing of them - determines their final pension outcome. In particular it will benefit people whose work history includes an extended period of time outside the paid workplace, while raising families or in a full-time caring role.

This approach will make it easier for many post-2012 pensioners affected by the 2012 rate band changes who are currently assessed under the yearly average model, to qualify for a higher rate of the State Pension (contributory). A person who reached pension age after 1st September 2012 and 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. Up to 10 years of other credits, for example, awarded when on Jobseekers or Illness Benefit, may also be used, subject to the total credits not exceeding 20 years.

So, for example, a person might receive a maximum pension based on 20 years paid PRSI contributions, 5 years jobseeker credits, and 15 years HomeCaring Credits (before or after 1994), over a 50 year period and qualify for a maximum rate pension, despite additional gaps of up to 10 years. Those with fewer contributions will have a pro-rata entitlement. For example, someone with 18 years PRSI contributions and 18 years homecaring may qualify for a 90% contributory pension.

Work is underway to draft legislation to enable implementation of these arrangements. In line with the legislation, IT solutions must be developed to implement the changes. Accordingly, in the final quarter of this year, the Department will begin inviting impacted recipients of the State Pension (contributory) to seek a review of their pension calculations, with the first payments being made in the first quarter of 2019, backdated to the 30th March 2018.

I hope this clarifies the matter for the Deputy.