Written answers

Thursday, 9 March 2023

Department of Employment Affairs and Social Protection

State Pensions

Photo of Richard BrutonRichard Bruton (Dublin Bay North, Fine Gael)
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274. To ask the Minister for Employment Affairs and Social Protection if she can make provision to ensure that those persons who had been in receipt of illness benefit for a substantial number of years, commencing before there was a requirement to apply for invalidity pension, will not be denied a contributory old age pension on grounds of insufficient paid stamps, bearing in mind that had they switched to invalidity pension they would have automatically qualified for COAP at age 66, without regard to contributions, and their long period of certified illness shows they met the conditions for invalidity pension. [12145/23]

Photo of Heather HumphreysHeather Humphreys (Cavan-Monaghan, Fine Gael)
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There are a number of payments and pensions paid by my Department to people over State Pension Age. One of these is the State Pension (Contributory) (SPC), currently qualification for which is based on a number of criteria:

- Be aged 66 or over.

- Have entered the Social Insurance system before you turn 56 (i.e., you must have paid PRSI contributions 10 years before you reach State Pension age).

- Have a minimum of 520 paid social insurance contributions (i.e., 10 years reckonable PRSI contributions).

It should be noted that 10 years is only the minimum requirement.

PRSI Credits are awarded in circumstances such as unemployment or illness, and their purpose is to help protect the social insurance entitlements of insured persons during periods when they may not be in a position to pay contributions.

There are currently two main methods of calculating State Pension (Contributory); the Yearly Average approach and the interim Total Contributions approach, with the claimant receiving a rate based on the "better of" the two calculations. Credits are applied under both methods, provided the minimum number of contributions set out above are met.

Under the Interim Total Contributions Approach to calculating the State Pension (Contributory), the total number of paid contributions can be supplemented by up to 20 years of credited contributions. These credits can take the form of HomeCaring periods (maximum of 20 years) or ordinary credits (maximum of 10 years) for reasons such as unemployment or illness. The total combined credits cannot exceed 20 years, for example a person may receive a maximum pension based on a record of 20 years paid PRSI contributions, 5 years jobseekers credits, and 15 years HomeCaring credits (before or after 1994).

Under the Yearly Average approach, credited contributions may be awarded in circumstances such as illness and unemployment. There is no limit to the number of credits used in the calculation of SPC, once a person satisfies the requirements of 520 paid contributions. In addition, the Homemakers Scheme allows up to 20 years (since 1994) spent caring for children under 12 years of age or for an incapacitated person(s) to be disregarded in calculating a person's yearly average number of contributions and credits, and for homemaker credits to be awarded for homemaking periods of less than a full contribution year.

A change in the rules and regulations governing the Illness Benefit scheme in 2009 included the introduction of a limit on the period for which Illness Benefit can be paid. Subject to the level of relevant PRSI contributions paid, Illness Benefit is now only payable for a maximum period of 2 years. Where a person exhausts their entitlement to a payment of Illness Benefit and is expected to remain unfit to attend work for a further period of at least 12 months, they have the option of making an application for Invalidity Pension or Disability Allowance.

At the time of the change mentioned above, those who had been in receipt of Illness Benefit on a long-term basis were, as an exceptional measure, afforded the option, subject to continued appropriate certification, to remain on Illness Benefit on a continuous duration basis or to make an application for Invalidity Pension or Disability Allowance.

Persons in receipt of Illness Benefit may avail of the credits outlined above.

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 (based on their share of household means) with a maximum payment of 95% of the SPC; or

- An increase for a qualified adult (based on their own means), 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 State Pension Contributory.

I hope this clarifies the matter for the Deputy.


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