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 Header Item Estimates for Public Services 2019: Message from Select Committee
 Header Item Ceisteanna - Questions
 Header Item Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions
 Header Item State Pension (Contributory)

Thursday, 4 April 2019

Dáil Éireann Debate
Vol. 981 No. 5

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Estimates for Public Services 2019: Message from Select Committee

An Leas-Cheann Comhairle: Information on Pat the Cope Gallagher Zoom on Pat the Cope Gallagher The Select Committee on Rural and Community Development has completed its consideration of the following Revised Estimate for public services for the service of the year ending 31 December 2019 - Vote 42.

Ceisteanna - Questions

Ceisteanna ar Sonraíodh Uain Dóibh - Priority Questions

State Pension (Contributory)

 1. Deputy Willie O'Dea Information on Willie O'Dea Zoom on Willie O'Dea asked the Minister for Employment Affairs and Social Protection Information on Regina Doherty Zoom on Regina Doherty if the total contributions approach to calculating entitlement to the contributory pension will come into effect in 2020; and if she will make a statement on the matter. [15534/19]

Deputy Willie O'Dea: Information on Willie O'Dea Zoom on Willie O'Dea This relates to the Government's announcement of a new system for calculating people's entitlement to contributory old age pension, namely, the total contributions approach. The Government gave the impression that this system would be in place from 2020. Is that still the position? If that is the Government's intention, when will we see the legislation providing for it?

Minister for Employment Affairs and Social Protection (Deputy Regina Doherty): Information on Regina Doherty Zoom on Regina Doherty The introduction of a total contributions approach, TCA, to establishing the level of entitlement for all new State pension (contributory) claims was signalled by the then Government in the national pensions framework in 2010. At that time it set a target date of 2020 for the implementation of TCA. More recently, the Roadmap for Pensions Reform 2018-2023 targeted implementation of TCA from the third quarter of 2020. This is subject to the necessary legislation being enacted and supporting structures being in place.

Consultation is a very important part of the development and design of any new pension system. With this in mind, I launched a public consultation on the design of TCA on 28 May 2018 to which a wide variety of stakeholder groups were invited to make submissions. A number of workshops were also held on the day to elicit views and feedback.

Shortly afterwards all Oireachtas Members were invited to a detailed briefing by my officials in Leinster House. The consultation was open for more than three months and the Department received almost 300 responses from individuals and organisations. Those submissions outlined the views of respondents on the issues of most interest to them.

Having carefully examined the outputs of the consultation process, my Department is now designing the scheme and I intend to bring a proposal to Cabinet shortly setting out that design. Once the Government has agreed the approach to be taken, I will initiate the work required to introduce this reform. At that stage the heads of the Bill will go to the Oireachtas Joint Committee on Employment Affairs and Social Protection for pre-legislative scrutiny. As soon as the legislation is drafted it will be brought to the House and I intend to do it later this year.

Deputy Willie O'Dea: Information on Willie O'Dea Zoom on Willie O'Dea From the Minister's reply, I take it there is no guarantee that it will come into effect in 2020. As a result of the consultation, the necessity for legislation, Cabinet agreement etc., it may not kick in until later than 2020.

I want to ask the Minister about one or two technical aspects of the proposal. I know it is in the course of preparation and the Minister mentioned a consultation process with 300 submissions, etc. I am sure the Minister got a submission the rest of us received relating to the existing hurdle for someone to qualify. Regardless of their record, they must have at least 520 paid contributions. That is the position under the temporary arrangement the Government has introduced, which we supported, to accommodate people who became pensioners since 2012. The rules for the new system may not necessarily be the same as the rules that apply at the moment.

As the Minister will be aware, the initial hurdle was 260 paid contributions, which equates to five years' full paid stamps. When people have paid contributions for five years they usually have other credits, etc. The required number of paid contributions is a terrible cliff edge. There are very many people in the country who have paid between 260 and 500 contributions. I realise that there would be a big cost factor if the Minister were to reduce it in one go to 260, but surely some recognition can be given to people who have paid at least 260 contributions even if it meant being less generous in the allocation of credits, etc.

Deputy Regina Doherty: Information on Regina Doherty Zoom on Regina Doherty I cannot say what the Deputy has asked me to say because it is not true. Although there are no guarantees in life and obviously anything could happen between now and 2020, the Government's ambition is to start up contributions in 2020 and that has not changed. We cannot rule out something happening next month or next year, but that is the ambition and that is the roadmap we are working towards.

Many submissions were made for a variety of options to be included and we are looking at all of them. I hope what we will provide to Cabinet to rubber-stamp, hopefully, will be all encompassing. I do not want to discount anybody's contribution during their lifetime of work. I do not just mean work outside the home; I also mean to give people a lift or a step-up to include all the work they do inside the home. Although I am not in a position to tell the Deputy what the final outcome will look like, my aim is to ensure the system will work for generations to come, will be fair and equitable and will take into account everybody's contribution to society, both inside and outside the home.


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