Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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617. To ask the Minister for Employment Affairs and Social Protection if she will clarify matters (details supplied) in relation to the review of State pension (contributory) pensioners on post-2012 rate bands; and if she will make a statement on the matter. [43220/18]

Regina Doherty (Meath East, Fine Gael)
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A policy to introduce the total contributions approach, TCA, to pensions calculation was adopted by Government in the national pensions framework in 2010, as was the decision to base the entitlements of all new pensioners on this approach from around 2020.  In advance of this, 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 an interim “Total Contributions Approach” 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.  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.

People whose pensions were decided under the 2000-2012 ratebands were subject to a significantly more generous regime than those who qualified before or afterwards, as a yearly average of only 20 contributions per year, out of a maximum of 52, could attract a 98% pension.  The effect of the 2012 rate band changes, as it impacted upon those new pensioners since 2012, will be familiar to anyone who followed the debate on this matter over the last six years, and it is to mitigate that impact that this reform was always explicitly intended to achieve. 

If pre-2012 pensioners were also allowed avail of HomeCaring Credits, their arrangements, as a group, would continue to be significantly more generous than those of post-2012 pensioners.  There would also be a very significant cost which would be expected to be of the order of several hundred millions of euros each year.  This in turn would significantly impact upon the funds available for future pension rate increases, with consequential implications for pensioner poverty. 

It would also mean that, in being able to choose between TCA and the pre-2012 ratebands, those pensioners would, again, have a more advantageous contributory pension regime than those who reached pension age after 2012, and whose choice is between TCA and the post-2012 ratebands.  This would be a less fairer approach than the one being adopted by the Government.

For those with insufficient contributions to meet the requirements for a State pension (contributory), they may qualify for a means tested State pension (non-contributory), the maximum personal rate for which is €232, over 95% of the maximum rate of the contributory pension, and 70% qualify for this pension at the full rate.  This rate of payment does not include rent allowance, household benefits or fuel allowance.  Alternatively, if their spouse is a State pensioner and they have significant household means, their most beneficial payment may be an increase for a qualified adult, based on their personal means, and amounting up to 90% of a full contributory pension.

I hope this clarifies the matter for the Deputy.