Brendan Griffin (Kerry, Fine Gael)
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440. To ask the Minister for Employment Affairs and Social Protection if she will provide details on the way in which the total contribution approach for calculating pensions will be phased in over ten years starting in 2024; if averaging will be available during this ten-year period; and if she will make a statement on the matter. [52897/22]

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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I announced a series of landmark reforms to the State Pension system on 20th September 2022. The measures, which were approved by Government, are in response to the recommendations from the Commission on Pensions. The set of measures represent the biggest ever structural reform of the Irish State Pension system.

The reforms announced included a phased 10-year transition to the Total Contributions Approach and the abolition of the Yearly Average approach for calculating individual State Pension (Contributory) entitlement, to commence from January 2024. The transitional arrangements are to avoid a ‘cliff edge’ effect and to mitigate the impact of the move on the first cohort. During this transition period, individual pension rates will be based on best of the Total Contributions Approach, or a rate based on mix of Yearly Average and Total Contributions Approach, with the proportion accounted for by Yearly Average reducing from 90% to zero over 10 years and the proportion accounted for by the Total Contributions Approach increasing commensurately.

The current model of Interim TCA method, also known as the Aggregated Contribution Method, will become the definitive Total Contributions Approach model. A person can qualify for the maximum personal rate of State Pension (Contributory) if she/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.

My officials are working to implement the reforms, including the drafting of legislation and development of administrative and IT systems as necessary.

I hope this clarifies the matter for the Deputy.