Jennifer Whitmore (Wicklow, Social Democrats)
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114. To ask the Minister for Employment Affairs and Social Protection her plans in relation to women who were working in the home for a long time not eligible for certain pension entitlements; and if she will make a statement on the matter. [45733/21]

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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Subject to the standard qualifying conditions for State Pension (Contributory) also being satisfied, 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.

This is provided 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 Contribution Method or the 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.

- The 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 Contribution Method (also known as the Interim Total Contributions Approach) of pension calculation. HomeCaring Periods may be awarded for each week not already covered by a paid or credited social insurance contribution.

A policy to introduce the Total Contributions Approach (TCA) to pensions calculation from 2020 was adopted by Government in the National Pensions Framework in 2010. Before this, in January 2018, the Government agreed to a proposal that allows pensioners affected by the 2012 changes in rate bands to have their pension entitlement calculated using an interim “Total Contributions Approach” (also called the Aggregated Contribution Method) which includes up to 20 years of the newly introduced HomeCaring periods. The provision for the HomeCaring Periods Scheme fundamentally changed the entitlement of many who spent time out of the workforce caring for others. For the first time, home caring periods prior to 1994 were acknowledged.

Under the interim TCA, those who have a 40 year record of paid and credited social insurance contributions, subject to a maximum of 20 years of credits/homecaring periods, qualify for a maximum contributory pension where they satisfy the other qualifying conditions for the scheme.

Since April 2019, all new State (Contributory) Pension applications are assessed under all possible rate calculation methods, including the Yearly Average and the interim Total Contributions Approach, with the most beneficial rate paid to the pensioner. The elements which make up each method are set out in legislation.

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. Its terms of reference included consideration of how long-term carers could be accommodated in the pension system.

The Commission has now concluded its work and has submitted its final report to me.The report itself is extremely detailed, running to several hundred pages, and covers a range of complex matters in relation to the Pensions system which will require very careful consideration.

It should be noted that if a person does not satisfy the conditionality to qualify for State Pension (Contributory), s/he 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 his/her spouse is a State pensioner and has significant household means, his/her most beneficial payment may be an Increase for a Qualified Adult, based on his/her personal means, and amounting to up to 90% of a full contributory pension.

I hope this clarifies the matter for the Deputy.