Richard Bruton (Dublin Bay North, Fine Gael)
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148. To ask the Minister for Employment Affairs and Social Protection if persons who first paid a class A contribution after 1991 having previously been a modified rate payer and a homecarer should be assessed for pension solely on their class A record; if so, the reason a person (details supplied) is on a reduced pension; and if a total contribution calculation would alter their position. [46906/21]

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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Under social welfare legislation, the date of entry into insurance is the date a person becomes an insured person and enters employment for which a social insurance contribution is payable, once they are 16 years of age.  This contribution can be paid at the full, modified or self-employed social insurance rate.

Where a contributor has a mixed social insurance record with both modified and full-rate contributions, and commenced paying full-rate insurance on or after 6th April 1991, their date of entry into insurance is the date on which they first paid any social insurance, be it at a modified or full rate.  However, if the contributor had paid a full-rate contribution prior to 6th April 1991 and before they reached 56 years of age, the most favourable date of starting insurable employment is taken.

According to the records of my Department, the person concerned paid her first full-rate (Class A) contribution in the 1996/97 tax year.  Since this is after 6 April 1991, the date of entry to be used for calculation of her pension entitlement is the date when she first commenced employment (at modified PRSI rate) on 7 September 1973.

The person concerned reached pension age on 9 March 2021.  According to the records of my Department, she had a total of 1,296 qualifying full-rate paid and credited contributions from her date of entry into insurable employment on 7 September 1973 to end-December 2020.  This equated to a yearly average of 25 contributions and an entitlement to standard State pension (contributory) at 85% of the maximum rate.  The Homemaker’s Scheme was applied to the calculation of her pension entitlement.  She was notified in writing of this decision on 3 March 2021.

Her pension entitlement has been reviewed recently.  While her yearly average has increased, it remains within the 20-29 rate band and there is no change to her rate of pension payment, at 85% of the maximum rate of State pension (contributory).

An Aggregated Contribution Method (ACM) was introduced in January 2018 as an alternative to the ‘yearly average’ method of calculating pension entitlement for those State pension (contributory) customers born on or after 1 September 1946 and therefore affected by post-2012 Budget pension rates.  The ACM provides for up to 20 years of HomeCaring Periods in their pension entitlement calculation for applicants who took time out of the workplace for parenting or caring duties.

The pension entitlement  of the person concerned under the ACM calculation method amounts to 77.69% of the maximum pension rate, thus less than the rate of pension awarded under the yearly average calculation.  A total of 260 HomeCaring Periods have been included in the ACM calculation.

During the person’s employment in the civil service the rate of PRSI payable was a modified or reduced rate of PRSI.  This reduced PRSI rate conveys entitlement only to Widow(er)'s and Orphan's Contributory Pensions and limited Occupational Injuries Benefits.  It does not convey entitlement to the State pension (contributory) but the contributions can be used to provide entitlement to a mixed insurance pro rata State pension (contributory) based on combined full-rate and modified contributions.  The person’s entitlement to a mixed insurance pro rata State pension (contributory) was also examined, based on her combined full-rate and modified social insurance records.  Her rate of entitlement under this calculation is also less than the current rate of pension in payment to her.

Consequently, the person concerned is in receipt of the most financially beneficial rate of State pension (contributory) commensurate with her social insurance record as held by my Department. 

I hope this clarifies the position for the Deputy.