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Dáil
‹ Leaders' Questions

Pension changes for women

Summary

Mary Lou McDonald challenges the Taoiseach on 2012 pension changes that she says disproportionately hit women. The Taoiseach says the issue is complex, disputes when and how it was raised, and argues any reform must be comprehensive; the exchange becomes increasingly heated over who knew what and when.

I join with the Taoiseach and all of the House in our expressions of sympathy to and solidarity with the families and loved ones of Clare O'Neill, Michael Pyke and Fintan Goss. I also recognise the enormous efforts of our emergency services, our first responders, those organisations that deal with the homeless, ESB crews, public transport teams, people working in the health services and everybody who pulled together in the course of this weather event to keep us all safe. I also acknowledge communities the length and breadth of the land which will never lose their capacity to care about their neighbours and to keep an eye where necessary.

I want to return to the issue of the unfair changes that were made to the eligibility for the State pension. The changes were made and the consequences were known at the time to the Government.

It was well understood that they would have a disproportionate impact on women. Tens of thousands of women in the State are now affected and they are prevented from receiving their full entitlements. Many are losing out to the tune of €30 per week.

The National Women's Council, Age Action Ireland and the ICA have all called for a reversal of these changes. Indeed, the Taoiseach's own Minister for Finance described the situation as "bonkers and unbelievable" but it seems it was not bonkers enough to be addressed in his recent budget. In our budget, Sinn Féin did provide for this reversal. It would cost the Exchequer €70 million but the Government chose to ignore this proposal. Both Fine Gael and Fianna Fáil voted against a Sinn Féin motion in the Dáil last December that called for the 2012 changes to be reversed and for a remedy to be implemented. The Taoiseach, therefore, has had two significant opportunities in the past ten months to demonstrate he is on the side of these women, and he has reneged on both, leaving the women high and dry.

It seems that something happened at the weekend for the Soldiers of Destiny - not an epiphany or genuine realisation that they were wrong on this matter. Put simply, what happened was that the issue hit the headlines. Along came the Fianna Fáil Ard-Fheis and, lo and behold, despite passing on every opportunity to right the wrong, Fianna Fáil announced a change in its position.

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Something the Deputy never did.

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It has now tabled a Dáil motion, which I welcome and which sets out to achieve the very thing it opposed last December.

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Therefore, there is more brass on the necks of the Fianna Fáil leadership than one would expect in a marching band. Can we welcome Fianna Fáil to the corner of these women, no matter how late, cynical or self-serving its arrival might be? Here is the rub: the Taoiseach will lose the vote on the motion tomorrow night as I believe the Dáil will vote in support of the women. Given this reality, my questions are straightforward. Can the Taoiseach enlighten us as to when Fianna Fáil raised this issue with him in the course of the budget negotiations? Can he tell us when the 2012 changes will be finally overturned, and if their reversal will be accommodated in the social welfare Bill?

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Leo Varadkar The Taoiseach Fine Gael

This is a very complicated area. It is an area that took me quite some time to understand when I was Minister for Social Protection.

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Women understand it, though.

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Leo Varadkar The Taoiseach Fine Gael

Based on a lot of the commentary I have heard and even some opinion pieces I saw in the newspapers yesterday, I believe it is not fully understood by many of those who write about it or comment on it.

With regard to the comments of the Minister for Finance, Deputy Paschal Donohoe, it is very important to say his term "bonkers and unbelievable" referred to the existence of the marriage bar, which has not existed since 1973 but which was certainly a bonkers and unbelievable rule. It existed not in law but in many employments before that year. People who understand the pensions system will know that any public servant hired before 1995 pays PRSI at a lower rate, the 0.9% rate, and that rate does not entitle any public servant hired before 1995 to the State contributory pension, whether married or single, male or female, marriage-barred or not. It is important, therefore, not to confuse the 2012 change with the marriage bar because they are quite separate issues.

With regard to the changes of 2012, they did not just affect women, they affected men as well. Depending on whose estimates one accepts, the difference is about 60:40. Therefore, women were disproportionately affected. It did affect men as well as women, however, and it is important not to ignore all those men who did not deserve a mention in the Deputy's question. They were also affected by the change.

It is important to bear in mind that going back to the pre-2012 system is not necessarily fair either because it also had anomalies built into it. The most obvious of these was that somebody who paid 20 contributions, on average, got a 98% pension whereas somebody who paid 48 contributions, on average, got a 100% pension. Therefore, somebody who paid more than twice as many contributions got only 2% more in her or his pension. If a change is to be made to these rules, it should not be made in isolation because all one would do is throw up new anomalies and injustices. As a Government, we do accept there are anomalies in the system, the averaging one being the most obvious in that regard. Again, it is separate from the 2012 issue.

The Government believes any changes need to be carefully considered. They should not be done in isolation but comprehensively so as not to create new injustices or new anomalies. We should understand the full costs. We should answer the question of retrospectivity and whether it would apply to people who are already retired or just to people who are retiring now. We would need to understand who may gain and who may lose out from any change in the rules. Sometimes changing the rules can cause people to lose out as well as gain. We would need to profile the individual loss and we would also have to look at the impact on poverty. We should bear in mind that pensioner poverty among men in Ireland is higher than it is among women, which is something that often goes unreported.

A lot of work has been done in this regard by the Department of Employment Affairs and Social Protection. The first part was the publication of an actuarial review of the Social Insurance Fund because any money that is paid out from the State pension, contributory, has to be paid in from the fund so one would have to work out how additional money would be raised for that fund. The actuarial review is completed and will be published quite soon. The Minister, Deputy Regina Doherty, will soon publish a detailed document on the total contributions approach for public consultation. It is the new approach we want to move to, whereby everyone's contribution is counted and it does not matter when one makes them; what counts is the total number one makes throughout one's working career. That would also provide a generous disregard for those who took time out to look after children or disabled people in their home. The response should be comprehensive, not piecemeal.

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The Taoiseach did not answer the question.

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I fully accept that pensioner poverty is an issue that affects men as well as women, but it is also a fact that the changes made in 2012 disproportionately affect women. That is why it is an issue of such concern for organisations such as the Irish Countrywomen's Association. As complex as pensions are and the rules and regulations concerning them, it is not complicated to understand that a change was made in 2012 which is costing thousands of people, disproportionately women, up to €30 a week. Those people, and those women, have campaigned long and hard and I imagine have lobbied every Member of the Dáil on this issue, and they tell me they have received assurances from every party in the Dáil that the 2012 changes will be reversed. I do not pretend for a moment that that is the beginning and end of pension reform. Clearly, it is not, but I am saying directly to the Taoiseach that those women and men who are affected adversely by the changes now need to have their full entitlements re-established.

Could I repeat my questions? The Taoiseach might actually answer them this time around. When did Fianna Fáil raise this issue with him? Did it form part of his pre-budget discussion? I imagine a simple "Yes" or "No" would suffice. I believe the Government will lose the vote tomorrow evening. In the event of losing the argument, and losing the day, will the reversal of the 2012 rules appear in the social welfare Bill?

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Leo Varadkar The Taoiseach Fine Gael

It was not raised with me by Fianna Fáil or by Sinn Féin or by any other party in fact.

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I beg your pardon. It was raised by us in our pre-budget submission.

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Pat the Cope Gallagher An Leas-Cheann Comhairle Fianna Fáil

The Taoiseach should be allowed to speak without interruption.

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Leo Varadkar The Taoiseach Fine Gael

The question I was asked was whether in the run up to the pre-budget discussions, Fianna Fáil raised the issue with me. Fianna Fáil did not. Did any other party? No, they did not. They might have done a year or two years ago but that is a different question.

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The Taoiseach is misleading the House.

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I thought the Taoiseach read our pre-budget submission.

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Leo Varadkar The Taoiseach Fine Gael

That is not to say the matter was not raised in other discussions, perhaps with the Minister, Deputy Donohoe, but I was not at other discussions. As a Government we absolutely accept that there is a need to review this whole area, to examine anomalies and to come up with changes but those changes should not be made in isolation. If we are going to introduce pension reform we should do it comprehensively and properly.

However, there is one area where I disagree with a number of the NGOs and people campaigning in this space. I have read some of what they have said, which is that they want to move away from the contributory principle altogether. I disagree with that. I respect that other people may have a view. The National Women's Council took the view in an article written yesterday that contributions should not matter and that there should just be a pension and everybody should get the same. I do not agree with that because that would mean saying to people, men and women alike, who paid PRSI for 20, 30 or 40 years that that now counts for nothing.

It would say to people who now pay PRSI that that would count for nothing.

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That is a separate issue.

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Leo Varadkar The Taoiseach Fine Gael

If Sinn Féin shares the view of these NGOs and campaign groups that we should get rid of contributory pensions and the contributory principle and tell men and women alike to pay PRSI all their lives but that it should count for nothing, then Sinn Féin should tell the people that that is the party's policy.

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