Michael Creed (Cork North West, Fine Gael)
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122. To ask the Minister for Employment Affairs and Social Protection if she will clarify the situation regarding entitlement to a reduced rate of the State Pension (Contributory); the number of PRSI contributions required for such a payment; if existing contributions plus the homemakers' scheme and homemaking credits can be combined for the purpose of a reduced rate of the State Pension (Contributory); and if she will make a statement on the matter. [3552/23]

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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Social welfare legislation stipulates that a minimum of 520 full-rate paid contributions are required to qualify for the State Pension (Contributory).

Applicants for the State Pension (Contributory) have their entitlement assessed under two separate criteria, receiving a payment based on which method is most beneficial to the person. The Yearly Average (YA) method has been in place since the introduction of the contributory pension in 1961. The YA method sees all paid and credited contributions divided by time spent in the social insurance system to give an average of Social Insurance contributions per year with payments made on a banded basis. The current bands and payments are:

- Average of 48 or more - €265.30

- Average of 40-47 -€260.10

- Average of 30-39 - €238.50

- Average of 20-29 - €225.90

- Average of 15-19 - €172.90

- Average of 10-14 - €106.00

Under the Yearly Average method, applicants can apply under the Homemaker's Scheme for those years since 1994 spent caring for children under 12 or other dependent relatives to be disregarded in the calculation. Up to 20 years disregard can be applied. This means the pension average does not disadvantage an applicant for the time spent caring.

In January 2018, an interim Total Contributions Approach was introduced which removed the time spent in the Social Insurance system as a factor and simply added paid and credited contributions together. 2080 contributions (equivalent to 40 years) are required for a full rate payment with pro-rata payments for those who have the minimum required 520 paid contributions, but less than 2080.

Homecaring periods can be claimed for providing full time care to children under 12 or people aged over 12 who require an increased level of full time care. Up to 20 years of Homecaring Periods can be claimed.

Where a person reaches State Pension age and does not satisfy the conditions to qualify for a SPC or qualifies for less than the maximum rate, they may instead qualify for one of the following:

- The means-tested State Pension (Non-Contributory) (SPNC) which is a means-tested payment with a maximum payment of 95% of the SPC; or

- An increase for a qualified adult, amounting up to 90% of a full rate SPC pension where their spouse has a contributory pension; or

- Where their spouse/civil partner is deceased, a widow's/widower's/civil partner's contributory pension, which they may claim either based on their spouse's or their own social insurance record. The qualifying conditions for this require fewer contributions paid (260) than the SPC and the current maximum personal rate for those aged 66 or over is €265.30, i.e. the same as the maximum rate of the SPC, with allowances (e.g., the Living Alone Allowance) payable where applicable.

Last September, I announced a series of landmark reforms to the State Pension system. The measures are in response to the Pensions Commission’s recommendations and represent the biggest ever structural reform of the Irish State Pension system. One of the reforms agreed by Government is a phased 10-year full transition to the Total Contributions Approach and the abolition of the Yearly Average approach to commence from January 2024.

A further key measure is the introduction of a new flexible pension system in Ireland which will provide people with choice by allowing them to defer drawing down their State Pension payment up to the age of 70.

People will decide for themselves what best suits their needs and circumstances. For example, in the case of a person who reaches age 66 and does not have sufficient contributions to qualify for a full pension, they will now have the option to work for longer to build up additional entitlements. If a person has less than 10 years' PRSI reckonable paid contributions, they can use this period of deferral to establish entitlement. A person will also have the option to continue working between age 66 and 70 and receive an actuarially based increase in their weekly payment rate, should they choose to defer their State Pension.

I hope this clarifies the matter for the Deputy.

Alan Kelly (Tipperary, Labour)
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123. To ask the Minister for Employment Affairs and Social Protection when a decision will issue on an investigation on the records of a person (details supplied) in County Kerry who has been awarded a reduced State Pension (Contributory). [3588/23]

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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The person concerned submitted an application for State Pension (contributory) on 31 August 2022. They were awarded the State Pension (contributory) at 85% of the maximum rate from 23 October 2022 and informed of this interim decision on 11 October 2022.

Following a review of the person’s entitlement to Homecaring credits, they were awarded the maximum rate State Pension (contributory) of €265.30 from 23 October 2022. They were informed of this decision on 20 January 2023. Any arrears due will issue shortly.

I hope this clarifies the matter for the Deputy.