Heather Humphreys (Cavan-Monaghan, Fine Gael)
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From September 2012, the rates of State pension (contributory) paid to those who had a yearly average of less than 40 contributions was lowered.

In recognition that these rate changes may have negatively impacted certain cohorts, in January 2018, the Government announced an Interim Total Contributions Approach (TCA) to calculate the entitlement of pensioners who reached State pension age on or after 1 September 2012 (i.e. those born on or after 1 September 1946) and who had a reduced rate pension entitlement based on those post Budget 2012 rate bands. HomeCaring Periods were introduced for the first time which allowed those who cared for children, or other dependent relatives, claim up to 20 years in lieu of contributions.

Work began on examining the social insurance records of over 94,000 pensioners in September 2018. Where these reviews resulted in an increase in the pensioner’s rate of payment, the increase was backdated to 30 March 2018 or the pensioners 66th birthday, as appropriate. As at the end of October 2019, with the project completed, 94,258 reviews had been finalised; of these, 53,092 (56%) were women and 41,166 (44%) were men. Of the 53,092 women reviewed 28,528 (54%) received an increase while the rest remained on their existing rate. Of the 41,166 men reviewed, 9,956 (24%) received an increase and the remainder continued to receive their same rate of payment. No pensioner had their pension payment reduced as part of this review.

People whose pensions were decided prior to 1 September 2012 were not affected by the Budget 2012 rate band changes. Consequently, people whose pensions were calculated under the 2000-2012 rate bands were subject to a significantly more generous regime than those who qualified before or afterwards, as a Yearly Average of only 20 contributions per year could attract a 98% pension.

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. I expect to bring the legislation required to introduce this, and other reforms, before the Oireachtas soon, with the phased transition commencing from January 2025.

I trust this clarifies the matter for the Deputy.