Claire Kerrane (Roscommon-Galway, Sinn Fein)
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451. To ask the Minister for Employment Affairs and Social Protection if she will consider providing pensioners on a partial rate with the full rate increase with regard to the €5 weekly payment rate increase for the State pension (contributory) given that the aim of ensuring State pension protects all pensioners from poverty; and if she will make a statement on the matter. [5823/22]

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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The State Pension (Contributory) is a PRSI-based pension, financed by contributions made by current workers and their employers, and paid to pensioners, at a rate based upon their PRSI record when working. In order to qualify for the maximum rate of the State pension (contributory) a person must, amongst other qualifying conditions, have a minimum of 520 paid reckonable PRSI contributions in order to qualify for the State Pension (Contributory).

An Interim Total Contributions Approach (TCA) has been available to all those who reached State Pension Age since September 2012. Since April 2019 all new State Pension (Contributory) applications are assessed under all possible rate calculation methods, including the Yearly Average and Interim TCA, with the most beneficial rate paid to the pensioner.

Those with fewer than the minimum number of PRSI contributions paid over the years may alternatively qualify for the State Pension (Non-Contributory), which is a means-tested pension, financed by the Exchequer, and paid at up to 95% the maximum rate of the State Pension (Contributory). There are also significant disregards in the household means test for the State Pension (Non-Contributory). Alternatively, if their spouse has a contributory pension, they may qualify for an increase for a Qualified Adult (based on their own means), amounting up to 90% of a full rate State Pension (Contributory). The most advantageous payment for a pensioner will depend upon their individual circumstances.

Reduced pensions are paid to those with lower contribution records over a working life. Arrangements are also in place for the payment of pro-rata pensions to those with mixed rate insurance records or contributions from different countries.

Reduced rate or pro-rata pensions are paid at a fixed percentage of the full rate payment, for instance, a person receiving a payment of 75% of the maximum rate receives 75% of any budget increase applied to the full rate pension. In order to ensure that the differential between the various rates is maintained, budget increases are also applied on a pro-rata basis.

The full budgetary increase to those with reduced payments would erode the differentials which exist and which are intended to reflect the level of contribution which a person has made to the social insurance fund. It would also mean that those on reduced rate pensions would, on an ongoing basis, benefit disproportionately from budget increases.

I hope this clarifies the matter for the Deputy.