Noel Grealish (Galway West, Independent)
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460. To ask the Minister for Employment Affairs and Social Protection with regard to a person who has modified PRSI contributions before paying A class contributions, if the effective date of entry into insurance for the calculation of State pension contributory can be the date that the full-rate reckonable contributions started being paid, given that the modified PRSI contributions were paid from 1981 and full-rate reckonable PRSI contributions commenced in 1988; and if she will make a statement on the matter. [24250/23]

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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The Yearly Average method of calculating State Pension Contributory payment rates has been used since the introduction of the contributory Old Age Pension (now State Pension contributory) in 1961. The date of entry is the date of first contribution irrespective of the class of social insurance.

The interim Total Contributions Approach was introduced in January 2018. It simply adds paid and credited contributions together. 2,080 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 2,080. Up to 20 years of Homecaring Periods can be claimed for time spend providing full time care to children under 12 or people aged over 12 who require an increased level of full-time care.

One of the landmark reforms to the State Pension system I announced last September is a ten-year phased transition to the Total Contributions Approach and the abolition of the Yearly Average method. This fairer system will calculate pension payments based on the number of social insurance contributions made by a person over his or her working life, with significant pension credits granted to people who have taken time out of the workplace for caring responsibilities.

During a transition period, individual pension rates will be based on the better of the Total Contributions Approach, or a rate based on a mix of the Yearly Average and Total Contributions Approaches, 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.

Officials in my Department are currently working on the legislation and systems to support the introduction of this change, which will be effective from 2024.

I hope this clarifies the matter for the Deputy.