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Dáil Question on State Contributory Pension and women who were home makers

Question No: 409 Ref No: 23782/13

To ask the Minister for Social Protection his views on the fact certain women are not eligible for the full rate of a State contributory pension because they chose to stay at home to care for their children or family relatives prior to 1994 when the homemaker scheme was first introduced; if he will agree that this affects a large proportion of our female pension earning population as it was much more common for women to remain in the home prior to the 1990s after which time it became more socially acceptable for mothers to be out at work; if there are any plans to deal with this sector of our society in order to give them due regard for the work they undertook in the home and ensure they receive full pensions; and if she will make a statement on the matter. – Anthony Lawlor.

* For WRITTEN answer on Tuesday, 21st May, 2013.

R E P L Y

Minister for Social Protection (Joan Burton T.D.):

The State pension is a very valuable benefit and is the bedrock of the Irish pension system. Therefore, it is important to ensure that those qualifying have made a sustained contribution to the Social Insurance Fund over their working lives.

The homemaker’s scheme makes qualification for the State pension (contributory) easier by disregarding time spent out of the workforce for caring duties. The scheme was introduced in and took effect from 1994. Eligibility for the homemaker’s scheme is conditional on firstly meeting the standard qualifying conditions for State pension.

There are no plans to review the effective date for this scheme as backdating the scheme further than 1994 would involve considerable costs. The 2007 Green Paper on Pensions indicated that to back-date the homemaker’s scheme to 1953, the year when the unified system of social insurance was introduced in Ireland, would cost the Exchequer in the region of €160 million. Costs in relation to this scheme, under the current rules, are expected to increase in the coming years due to the increase in female employment rates since 1994.

In relation to women and social insurance payments, it is worth noting that the Actuarial Review of the Social Insurance Fund confirms that the Fund provides better value to female rather than male contributors. Those with lower earnings and those with shorter contribution histories, mostly women, have and will continue to obtain the best value for money from the Fund. The social solidarity principle which underlies the Fund is reflected in the fact that, for those at the higher end of the income distribution, the Fund is redistributive and they generally get back less than they pay in.

While my Department will keep the homemaker’s scheme under review, any improvements which could result in further costs for the Exchequer could only be considered in a budgetary context in an improved fiscal environment.

ENDS