Heather Humphreys (Cavan-Monaghan, Fine Gael)
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In September 2022, 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 measures announced is the introduction of flexibility to the State Pension (Contributory), allowing a person to defer access to their State Pension (Contributory) up to the age of 70 and receive an actuarially based increase in their weekly payment rate.

A person with less than 40 years contributions can use the period between 66 and 70 years of age to build up additional entitlements and, if a person has less than 10 years PRSI reckonable paid contributions, they may be able to use this period to establish entitlement.

As the State Pension age remains at 66 years, a person can still draw their State Pension (Contributory) at State Pension age.

Department officials are currently working on these reforms, including the drafting of legislation and development of administrative and IT systems. I expect to bring the legislation required to introduce the flexibility to the State Pension (Contributory) before the Oireachtas soon, with the scheme being fully implemented for those who reach State Pension age (66) from Q1 2024.

I hope this clarifies the matter for the Deputy.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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One of the landmark reforms to the State Pension system that I announced in September of last year is a ten-year phased transition to the Total Contributions Approach and the abolition of the Yearly Average method. This was part of recommendations from the independent Pensions Commission following its in-depth analysis of the State pension system.

During the transition period, individual pension rates will be based on the best 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.

This fairer system, which removes existing anomalies with the Yearly Averaging 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.

Officials in my Department are currently working on the legislation and systems to support the introduction of the ten-year phased transition to the Total Contributions Approach and the abolition of the Yearly Average method. I expect to bring the legislation required to introduce the Total Contributions Approach before the Oireachtas soon, with the phased transition commencing from January 2025.

I hope this clarifies the matter for the Deputy.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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The State Pension (Contributory) system currently gives significant recognition to those whose work history includes an extended period of time outside the paid workplace, often to raise families or in a full-time caring role. PRSI Credits, Homemaking Disregards and HomeCaring Periods recognise caring periods of up to 20 years outside of paid employment in the calculation of a payment rate. Since April 2019, State Pension (Contributory) applications are assessed under all possible methods with the most beneficial payment rate paid to the applicant.

Despite the existing measures within the State Pension system that recognise periods spent caring, some long-term carers of incapacitated dependents may still face barriers in accessing the State Pension (Contributory). They may for example have difficulty establishing the minimum number of 10 years' paid contributions.

Last year, I announced a series of landmark reforms to the State Pension system, including the enhancement of State Pension provision for people who have been caring for incapacitated dependents for over 20 years. It will do this by attributing the equivalent of paid contributions to long-term carers to cover gaps in their contribution record.

The Long-Term Carer's Contributions (LTCC) will be available to those who provided full time care to incapacitated dependents for 20 years (1040 weeks) or more. The periods of care-giving do not need to be consecutive. I expect to bring the legislation required to introduce the LTCC before the Oireachtas soon, with the scheme being fully implemented from January 2024. This month my Department launched an online system for people to register for LTCC. This will facilitate the expeditious processing of LTCC upon enactment of the legislation.

I hope this clarifies the matter for the Deputy.

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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The introduction of an Auto Enrolment Retirement Savings System is a Programme for Government commitment, and a key priority for me as Minister for Social Protection.

Last year, I published 'The Design Principles for Ireland’s Automatic Enrolment Retirement Savings System', which set out the new system in detail. Implementation of the AE system has been gathering pace since then, with the first enrolments expected in the latter half of 2024.

A dedicated project team in the Department of Social Protection is solely focused on implementing the agreed design, including by drafting the necessary legislation that will underpin it, designing the organisational structures and the technical system to operate it, and communicating this landmark reform to stakeholders and the public.

It is my intention to publish the AE Bill during this current session of the Dáil, with initiation of its passage through the Oireachtas immediately thereafter. This will be a major milestone in progressing towards the implementation of AE.

Work also continues on putting the administrative and operational processes in place, in order to ensure that contributions in the AE system can commence in 2024. In this context, a phasing arrangement, such as enrolment by cohorts of participants by size of employers, as happened in the UK for example, is not currently envisaged.

Where a phasing approach will be adopted is in the setting of the contribution rates. Here the rates for employers and employees will start out at 1.5% of gross salary, rising by 1.5 percentage points every three years, and reaching the full rate of 6% for both in year 10. This will be topped up by the State at a rate of €1 for every €3 that the employee contributes. For employees, the phasing in of contribution rates on a staged basis will allow time for the contribution rate to 'bed in' and earnings to adjust before the next increase. For employers, this approach gives very clear certainty as to the rates that will be applicable so as to facilitate the gradual absorption of these labour costs, thereby easing the burden on employers in implementing this reform.

I hope this clarifies the matter for the Deputy.