Mary Lou McDonald (Dublin Central, Sinn Fein)
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670. To ask the Minister for Employment Affairs and Social Protection the basis on which the review of social insurance records of pensioners in receipt of a reduced rate State pension (contributory) entitlement based on post-Budget 2012 rate bands excludes those born prior to 1 September 1946. [21274/20]

Heather Humphreys (Cavan-Monaghan, 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. In September 2012, new rate bands were introduced that saw benefits more closely aligned to contributions made and helped the long term sustainability of the Social Insurance Fund, protecting future beneficiaries.

In January 2018, a Government Decision to introduce a new interim Total Contributions Approach (TCA) to the calculation of State Pension allowed those pensioners who reached pension age from September 2012 (i.e., those born on or after 1 September 1946), to have their pension entitlement calculated by an interim “Total Contributions Approach” (TCA) which included consideration for up to 20 years of HomeCaring Periods. The interim TCA ensures 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 (i.e. those born before 1 September 1946) were subject to a significantly more generous payment regime than those who qualified before or afterwards, as a Yearly Average of only 20 contributions per year (out of a possible maximum of 52) could attract a 98% pension. If pre-2012 pensioners were also allowed avail of the interim Total Contributions Approach, including 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 to the Social Insurance Fund. This in turn could significantly impact funds available for future pensioners with consequential potential implications for pensioner poverty.

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 €237 (over 95% of the maximum rate of the contributory pension). 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.