Willie O'Dea (Limerick City, Fianna Fail)
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414. To ask the Minister for Employment Affairs and Social Protection why an application for the invalidity pension by a person (details supplied) was refused on the basis that they did not have sufficient contributions; the reason they have not received credits for the past two years in view of the fact that they have been in receipt of the disability allowance for the past seven years; and if she will make a statement on the matter. [10000/23]

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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Invalidity Pension is payable to an insured person who satisfies certain Social Insurance (PRSI) contribution conditions and who is permanently incapable of work due to an illness or incapacity and for no other reason.

Claimants must have at least 260 (5 years) paid PRSI contributions class (A, E, H or S) since entering social insurance and 48 contributions paid or credited in the last or second last complete contribution year before the relevant date of their Invalidity Pension claim.

The relevant date is:

(a)any date after the completion of one year of continuous incapacity for work, or

(b)any lesser period that may be prescribed, subject to the conditions and in the circumstances that may be prescribed where the insured person has entered into a continuous period of incapacity for work and he or she is subsequently proved to be permanently incapable of work.

The person concerned submitted an application for Invalidity Pension on 28 September 2022. It was decided that the relevant year in this case is 2017. According to the Department’s records there are 0 weeks qualifying contributions paid or credited for him in the contribution year prior to the relevant date (2016) and 0 weeks qualifying contributions paid or credited for him in the second last year prior to the relevant date (2015). This application has been disallowed and the person concerned was notified of the decision on 28 January 2023, the reasons for it and of his right of review and appeal.

The person concerned is not due credits for their Disability Allowance (DA) payment as they to not have the required social insurance (PRSI) contributions paid or credited in the tax years immediately prior to the award of their DA claim.

I trust this clarifies the position for the Deputy.

Emer Higgins (Dublin Mid West, Fine Gael)
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416. To ask the Minister for Employment Affairs and Social Protection the reason a person applying for home caring in the context of State pension (contributory) must have a date of birth after 11 September 1946, even when they have paid in excess of 520 paid contributions; and if she will make a statement on the matter. [10012/23]

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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The current State Pension (Contributory) system gives significant recognition to those whose work history includes an extended period outside the paid workforce, often to raise families or to provide another full-time caring role.

Applicants for the State Pension (Contributory) have their entitlement assessed under two separate criteria, receiving a payment based on whichever 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 uses 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.

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. 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. This reform 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. The Interim Total Contributions Approach arrangement results in a fairer and a more transparent system, as the person’s lifetime contribution is reflected in the State Pension (Contributory) payment received.

People whose pensions were decided under the 2000-2012 rate bands (i.e., those born before 1 September 1946) were subject to a significantly more generous payment regime than those who qualified before or afterwards, as a Yearly Average of only 20 contributions per year (out of a maximum of 52) could attract a 98% pension. If pre-2012 pensioners were also allowed avail of HomeCaring Credits, their arrangements, as a group, would continue to be significantly more generous than those of post-2012 pensioners. There would also be a very significant cost which, in turn, could significantly impact funds for future pension increases with consequential implications for pensioner poverty.

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.

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, he/she may qualify for the means-tested State Pension (Non-Contributory), the maximum rate of which is over 95% of the rate of the State Pension (Contributory). Alternatively, an Increase for a Qualified Adult (IQA) is paid, generally, where a pensioner has an adult dependent who does not have enough contributions to claim a maximum rate State Pension (Contributory) in his or her own right. The payment rate for the IQA is up to 90% of a full contributory pension. The most advantageous payment for a pensioner will depend upon their individual circumstances.

I hope this clarifies the matter for the Deputy.