Written answers

Tuesday, 9 July 2019

Department of Employment Affairs and Social Protection

State Pension (Contributory) Eligibility

Photo of Éamon Ó CuívÉamon Ó Cuív (Galway West, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

768. To ask the Minister for Employment Affairs and Social Protection her plans to grant credits to self-employed persons who were in full-time self-employment before self-employed pay related social insurance, PRSI, was introduced for the purposes of assessing them under the new total contributions approach to assessing State pensions; and if she will make a statement on the matter. [29338/19]

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

The introduction of a Total Contributions Approach (TCA) to establishing the level of entitlement for all new state pension contributory claims was signalled by the then Government in the National Pensions Framework in 2010.  At that time it set a target date of 2020 for the implementation of TCA.  More recently, the Roadmap for Pensions Reform 2018-2023 targeted implementation of the TCA from Q3 of 2020.  This is subject to the necessary legislation being enacted and supporting structures being in place.

Consultation is a very important part of the development and design of the new pension.  With this in mind, I launched a public consultation on the design of the TCA on the 28th of May 2018 to which a wide variety of stakeholder groups were invited.  A number of workshops were also held on the day to elicit views and feedback.

Shortly afterwards, Oireachtas members were invited to a detailed briefing by my officials in Leinster House.  The consultation was open for over 3 months and the Department received almost 300 responses from individuals and organisations.  Those submissions outlined the views of respondents on the issues of most interest to them including in particular how self-employed people and Class S PRSI contributions since 1988 could be treated.

Having carefully examined the outputs of the consultation process, my Department is now designing the scheme and I intend to shortly bring a proposal to Government setting out that design.  When the Government has agreed the approach to be taken, I will initiate the work required to introduce this reform. 

I hope this clarifies the matter for the Deputy.


Monica Condron
Posted on 12 Jul 2019 5:19 pm (Report this comment)

In the National Pension Framework 2010 it was also signalled that the Total Contributions system would be calculated on a 30 year basis which would have meant self employed people people who started paying PRSI in 1988 would have 32 years of contributions in 2020 and would be entitled to a full contributory pension. If in 2020 those retiring will require 40 years to get a maximum pension then all of those self employed people will be short 8 years contributions. Their pension based on 32 years contributions would give them approx 80% of the full pension ( €194.64 at the present rate of €248.30. That's some kick in the teeth for someone expecting a full pension.

Monica Condron
Posted on 12 Jul 2019 5:35 pm (Report this comment)

A correction to my comment. The rate for 32 years contributions should be €198.64 or 80%.

Log in or join to post a public comment.