State Pensions

5. Deputy Paula Butterly asked the Minister for Social Protection the changes he proposes to introduce to support women of older generations who are not eligible for a contributory State pension despite having made PRSI contributions through employment during their working lives but who do not have a sufficient contribution record to qualify for a pension at pensionable age; whether he is considering any further measures to recognise periods spent out of the workforce due to caring or family responsibilities; and if he will make a statement on the matter. [67756/26]

There is still a significant amount of women of older generations who are not eligible for State contributory pensions despite having made PSRI contributions through employment during their working lives but who do not have a sufficient contribution record to qualify for a pension when they come of pensionable age. Is the Minister considering any further measures to recognise these periods spent outside of the workforce due to family responsibilities or a caring role?

I thank Deputy Butterly for her question. As the Deputy knows, the State contributory pension is financed through the Social Insurance Fund, with entitlement based on a person’s social insurance record. To qualify, a person must generally have at least 520 paid contributions, which is equivalent to ten years of contributions. This requirement maintains the contributory nature of the scheme. It ensures a sufficient connection with the social insurance system. The system makes significant provisions for gaps in a person’s contribution record arising from caring responsibilities. Up to 20 years of home caring periods or homemaking disregards may be included when calculating a person’s rate of contributory State pension, subject to the relevant conditions. These periods can improve the rate of pension payable but they do not satisfy the minimum requirement of 520 paid contributions. Further, where a person has provided full-time care to an incapacitated person for a total of at least 20 years, long-term carer's contributions may be awarded. These are treated in the same manner as paid contributions for the contributory pension. This can enable a long-term carer to qualify even where they do not otherwise have the 520 paid contributions. For those who do not qualify for a contributory State pension or who qualify for a reduced rate, they can apply for the means-tested non-contributory pension, which provides an important pension safety net subject to the relevant means, habitual residence and other qualifying conditions. Alternatively, as the Deputy will be aware, where a person is receiving a contributory State pension, an increase for a qualified adult may be payable in respect of their spouse or partner, subject to an assessment of the qualified adult’s means. We hope that these measures mean that no one with a financial need is excluded from a payment in their old age. In its 2021 report, the Commission on Pensions strongly supported the minimum requirement of 520 paid contributions. Any future changes to that would have to be considered in the context of the sustainability of the State pension fund and the Social Insurance Fund going forward.

I acknowledge the measures that have been introduced over recent years, including the homemakers scheme, home caring periods and long-term carer's contributions. They are positive developments and help to ensure that caring work receives greater recognition within the pension scheme. However, some women from older generations are not benefiting fully from these reforms because they had already reached the pension age before many of these measures were introduced or because they do not have the minimum level of paid contributions needed to access the contributory pension scheme. A concern for me, particularly in my constituency in County Louth, relates to women whose caring years took place largely before 1994. While home caring periods and other reforms have improved recognition of caring responsibilities, many women feel they have received little recognition for years spent raising families at a time when pensions supports for carers were far less developed. Many of these women made contributions during their working lives.

The Social Welfare Act 1997 legislated for changes in the minimum number of paid contributions. The number increased to 520 in April 2012. The homemakers scheme allowed time spent caring for children under 12 since 1994 to be disregarded in the divisor of the yearly average method of calculation. Home caring periods were introduced for those who reached State pension age after September 2012. They can be awarded from any time, including pre-1994. Each of the pension caring supports is specific to the method of calculation but we have to ensure equality, and there is a concern that if pre-2012 pensioners were also allowed to avail of the total contributions approach, including home caring periods, their arrangements would be significantly more generous than those of post-2012 pensioners. I am happy to engage with the Deputy if she has specific cases, so we can give her a more detailed response. We are very focused on the sustainability of the pension fund going forward but we do want to acknowledge those who spent time away from the workforce in a caring capacity. I am anxious, within the context of sustainability, that people do not lose out and about the need for fairness for every pensioner.

I thank the Minister for offering to look at this in more detail, including specific cases. These women, for decades, did everything that society asked them to do. They worked, stayed at home and took care of their children and other family members. It is really important because it is that cohort of older women, who in many cases could be our own mothers, who do not have their own financial independence. It is maybe means-tested or linked to their spouses' entitlements. That is really unfair and when we talk about equality, we have to give women the recognition for the work they have done inside and outside the home down through the decades. We are in modern times and we keep saying there is more equality but where is the equality for that cohort of women? The only options they had back in the day was the famous pin money or runaway money. Let us give them that comfort.

I will engage with the Deputy because that is also the cohort of women that was forced to give up work when they got married, by law. My own mother was one of those. We will certainly engage with the Deputy but it is important that we have that concept of fairness across the system. We also have to keep a very firm eye on sustainability, as we are all getting older. The Deputy is right in regard to those people who made caring their priority and had no other choice. We will engage with her in that space.