Paul Murphy (Dublin South West, RISE)
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400. To ask the Minister for Employment Affairs and Social Protection her views on whether it is now an appropriate time to reverse the unjust reduction to the State pensions of 36,000 older people which were cut due to changes in the State pension system in 2012, given that they have not had their pension rates restored in light of the current situation of rising prices (details supplied); and if she will reverse the changes brought in ten years ago. [35761/22]

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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This Government acknowledges the important role that carers play and is fully committed to supporting them in that role.  Accordingly, the current State Pension (Contributory) system includes a range of measures including PRSI Credits, Homemaking Disregards and HomeCaring Periods to recognise caring periods outside of paid employment in the calculation of a pension payment rate.  

In January 2018, the Government announced an Interim Total Contributions Approach (Interim TCA), also known as the Aggregated Contribution Method, to calculate the entitlement of pensioners who reached State Pension age on or after 1 September 2012 (i.e. those born on or after 1 September 1946) and who had a reduced rate pension entitlement based on post Budget 2012 rate bands.  When the Interim TCA was introduced, it included provision for the HomeCaring Periods Scheme which fundamentally changed the entitlement of many who spent time out of the workforce caring for others.  For the first time, it acknowledged home caring periods prior to 1994.

Using Interim TCA, a person can qualify for the maximum personal rate of State Pension (Contributory) if s/he has 40 years or more PRSI full-rate paid contributions.  If a person has fewer than 40 years PRSI full-rate paid contributions, HomeCaring Periods and PRSI Credits can be used as part of the State Pension payment rate calculation, where they satisfy the other qualifying conditions for the scheme.  There is provision for 10 years of PRSI Credits and 20 years of HomeCaring Periods, but with a cap of 20 years combined PRSI Credits and HomeCaring Periods.  

Since April 2019, all new State Pension (Contributory) 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 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, in recognition of the enormous value of the work carried out by them.

The Pensions Commission was established in November 2020 to examine the sustainability of the State Pension system and the Social Insurance Fund.  The Commission’s terms of reference included consideration of how to accommodate, within the State Pension system, people who have provided long-term care for incapacitated dependants.

The Pensions Commission’s Report was published on 7th October 2021.  It established that the current State Pension system is not sustainable into the future and that changes are needed.  The report set out a wide-range of recommendations, including enhanced pension provision for long-term (in excess of 20 years) carers, phased full transition to a Total Contributions Approach and the abolition of the Yearly Average approach. 

In the interests both of older people and future generations of older people, the Government is considering the comprehensive and far reaching recommendations in the Commission’s Report very carefully and holistically.  My officials are examining each of the recommendations and I am consulting across Government through the Cabinet Committee system with meetings scheduled over the coming weeks.  The views of the Joint Committee on Social Protection, Community and Rural Development and the Islands and the Commission on Taxation and Welfare will also be considered as part of these deliberations.   Once we have considered all of these matters in detail and taken on board the views of my Ministerial colleagues, I intend bringing a recommended response and implementation plan to Government. 

I hope this clarifies the matter for the Deputy.