David Cullinane (Waterford, Sinn Fein)
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1129. To ask the Minister for Employment Affairs and Social Protection the progress made on implementing the Programme for Government commitment on pensions for carers; if the matter for carers of incapacitated persons will be addressed; and if she will make a statement on the matter. [18767/21]

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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The Programme for Government “Our Shared Future” includes a commitment to examine options for a pension solution for carers, the majority of whom are women, particularly those of incapacitated children. This Government acknowledges the important role that carers play and is fully committed to supporting them in that role.

As the Deputy is aware, the Pensions Commission was established in November 2020 to examine sustainability and eligibility issues with the State Pension and the Social Insurance Fund, in fulfilment of a Programme for Government commitment. As part of its Terms of Reference the Commission has been asked to consider how the State pension system can further accommodate long-term carers. These issues will be considered from a perspective of fiscal and social sustainability, and intergenerational fairness. Details on the Commission's work, including agendas, minutes and presentations made to the Commission, are available on its website, PensionsCommission.gov.ie.

The State pension system currently gives significant recognition to those whose work history includes an extended period of time outside the paid workplace, often to raise families or in a full-time caring role, through the award of credits and/or the application of the Homemaker’s Scheme (under the Yearly Average method for payment calculation) and/or the application of HomeCaring Periods (under the Aggregated Calculation Method or Interim Total Contributions Approach). Details of these are -

- Credits – PRSI Credits are awarded to recipients of Carer’s Allowance (and Carer’s Benefit) where they have an underlying entitlement to credits. Credits are also awarded to workers who take unpaid Carer’s Leave from work.

- Homemaker’s Scheme - The scheme, which was introduced with effect from 1994, is designed to help homemakers and carers qualify for State Pension (Contributory). The Scheme, which allows periods caring for children or people with a caring need to be disregarded (from 1994), can have the effect of increasing the Yearly Average.

- HomeCaring Periods – This Scheme makes it easier for a home carer to qualify for a higher rate of State Pension (Contributory). HomeCaring Periods can only be used under the Aggregated Calculation Method (also known as Interim TCA or T12) of pension calculation. HomeCaring Periods may be awarded for each week not already covered by a paid or credited social insurance contribution.

Since April 2019 all new State (Contributory) Pension applications are assessed under all possible rate calculation methods, including the Yearly Average and Aggregated Contribution Method, with the most beneficial rate paid to the pensioner. The elements which make up each method are set out in legislation. To allow pensioners choose the elements in how their pension is calculated would likely incur very significant costs which could further undermine the sustainability of the State Pension system. The cost of paying the State Pension is already increasing by approximately €1 billion every 2.5 - 3 years or so, due to demographic pressures alone. It is also estimated that my Department will spend over €8.8 billion on State Pensions in 2021.

It should be noted that if a person does not satisfy the conditionality to qualify for State Pension (Contributory), they may qualify for the means-tested State Pension (Non-Contributory), the maximum rate of which is over 95% that of the maximum rate of the State Pension (Contributory). 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 to up to 90% of a full contributory pension.

I hope this clarifies the matter for the Deputy.