Changes to Contributory Pension Scheme

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Dáil Issues, Social Welfare

To ask the Minister for Employment Affairs and Social Protection if correspondence has been issued to date outlining changes under the total contributions approach 2012 to the pensioners affected by contributory pension changes in 2012; and the reason for the delay in issuing this correspondence in view of the fact that the decision to address this issue was made on 23 January 2018.

– Clare Daly T.D.

REPLY: Pensioners born on or after the 1st September 1946, affected by the 2012 changes in rate bands, can have their state pension (contributory) entitlement calculated under an interim ‘Total Contributions Approach’ (TCA).  The announced changes also provide for up to 20 years of home caring periods in the pension entitlement calculation, for those who took time out of the workplace for parenting or caring duties.

Significant preparatory work was required to design and develop the necessary ICT system changes and the necessary legislative provisions to underpin these changes, as published in the Social Welfare Bill last week.

The latest data, available at the end of October, identified approximately 79,000 pensioners to be reviewed.  Of these, over 70,000 reside in Ireland.   The first 11,000 Information Letters issued last week to Irish residents.  I would anticipate that the remainder would issue by the end of this week or early next week at the latest.  Over 8,000 pensioners resident outside of Ireland are expected to receive letters in December.  The Department waited until it had access to end of month data before issuing letters as it wanted to capture as many as possible of those pensioners who will be entitled to a review.

The letter informs pensioners that my Department will contact them again directly with either the outcome of their individual review, where sufficient information is available, or to request further information regarding gaps in their social insurance record.  It is not necessary for anyone to contact the Department on this matter.

Examination of social insurance records is under way.  Reviews and payments will commence in Quarter 1 2019.   Where an increase is awarded, it will be backdated to 30 March 2018, or the person’s 66th birthday if later and arrears paid.  Pensioners who do not qualify for an increase will continue to receive their existing rate of entitlement.

QUESTION: To ask the Minister for Employment Affairs and Social Protection her views on whether the change from a 30 year qualifying base for a State pension (contributory) under the 2010 National Pensions Framework Total Contributions Approach to a 40 year approach as outlined in the recent public consultation document on the total contributions approach has been adequately communicated to the public in view of the fact that the recent public consultation on the issue elicited only 300 responses.

REPLY

There has been no decision on the number of years required to qualify for a maximum rate pension under the Total Contributions Approach that will apply from 2020, and so the question of publicising such a decision does not, at this point, arise.  This issue was, in fact, one of the matters the consultation sought opinions on, and those opinions will inform the final design of that scheme.

The consultation process on the proposed reforms which dates back to October 2007 was extensive and included the then Government publishing the Green Paper on Pensions, conducting regional seminars, a national conference, and consultation meetings with sectoral interests as well as the written submissions.

The Framework model arising from that did propose a 30 year requirement for a maximum rate pension under a Total Contributions Approach (TCA) from 2020, but it also had less generous HomeCaring provisions, which would have seen that reform significantly disadvantage many women who had spent time outside the labour market raising their children.  I believe that this would be unfair, given legacy issues around the marriage bar and the availability of childcare.

I launched the public consultation on the design of the TCA on the 28th of May to which stakeholder groups were invited.  A number of workshops were also held on the day to elicit views and feedback.  Members of the media were also there and the consultation was featured extensively on broadcast and written media.

All Oireachtas members were also invited to a briefing in Leinster House.  The consultation was open for over 3 months and we received almost 300 responses from individuals and organisations including open written submissions.  Those submissions outlined the views of respondents upon a number of issues, including the number of years required for a full pension, as intended as part of the consultation process.

Analysis of the views submitted is being finalised.  When I have considered this analysis, I will bring a proposal to Government in due course, and the scheme will be introduced through the standard democratic process, and the policy choices will, I believe, be broadly debated by members of the Oireachtas. I hope this clarifies the matter for the Deputy.