State pension total contributions approach
Deputy Boyd Barrett pressed the Taoiseach on discrimination in pension calculations and asked when the promised reform would happen. The Taoiseach said the total contributions approach was being developed, an actuarial review had been completed, and the Minister hoped to publish the new system for consultation before year’s end.
In regard to the discrimination against pensioners discussed earlier, I and several others raised this issue when the Taoiseach was the Minister for Social Protection, and he acknowledged then that there was problem with the averaging and a problem with people who did not benefit from the homemaker's credit being discriminated against because it was not retrospective. He acknowledged that a long time ago, at least a year to a year to a half ago, in engagements that took place in this House involving Members from both sides of this House. How come it has taken him this long to act on this and when will he do something about it? By the way, in our budget submission, we allocated several hundred million euro for expanding the homemaker's scheme, so we did include it in our budget submission. The Taoiseach said he read them all, so he should know it was in our budget submission at least. He has given no clear commitment as to when he will deal with this discrimination against more than 30,000 pensioners, many of whom are women, although not all, as he said. It is a discrimination and unfairness, nonetheless, which he has acknowledged. He said then that he was going to do something about it but he has still done nothing about it. When is he going to do something about it?
Comment on this
I will give the Deputy the same answer I gave him at that time. There is a problem with averaging and there is a problem with the homemaker's scheme, but the solution is not to go back to where we were before 2012 because there is a problem with that as well. The proposal that the Department for Employment Affairs and Social Protection has developed what is called the total contributions approach. That will get rid of averaging, it will take into account the total number of contributions a person made over the course of their career - there will be no averaging any more - and it will make provision for a period of homemaking.
Comment on this
The Taoiseach said that previously but when will that be done?
Comment on this
As I said earlier, the first thing that had to be done was an actuarial review of the Social Insurance Fund because the way it works is that PRSI contributions go in and PRSI contributions go out. That is how the benefits are paid for. That was the first thing that had to be done. That has been done and it went to Cabinet a few weeks ago. The Minister, Deputy Regina Doherty, will be in a position to publish, for public consultation, the new system, which will be the total contributions approach, and she anticipates being able to do that before the end of the year. As I mentioned earlier, none of these changes is straightforward. One needs to understand the costs involved, how they will be funded, how they will impact on different individuals, different groups of people and all those other matters. That is why it is not straightforward. The fact that there are no computerised records prior to 1985 makes it even more difficult because individual records - paper records - will have to be gone through.