‘Bonkers pen­sion bias’ will be fixed

Ano­maly left 35,000 peo­ple with lower pay­ments

Irish Daily Mail - - News - By James Ward Po­lit­i­cal Cor­re­spon­dent james.ward@dai­ly­mail.ie

THE Govern­ment has pledged to end what Paschal Dono­hoe has branded the ‘bonkers’ ano­maly that leaves 23,000 women with lower pen­sions – but it won’t be fixed un­til 2020.

The cur­rent sys­tem for cal­cu­lat­ing the con­trib­u­tory State pen­sion mea­sures how many PRSI con­tri­bu­tions, or ‘stamps’, a worker has made in their life­time, then di­vides by the num­ber of years they have been in the work­force.

In or­der to get a full State pen­sion, they need to have made a min­i­mum 48 PRSI pay­ments per year.

This sys­tem was in­tro­duced in 2012 but has meant that 35,000 peo­ple cur­rently don’t qual­ify for a full pen­sion, 23,000 of whom are women.

Many of them had to leave the work­force be­cause of the pub­lic ser­vice ‘mar­riage bar’, or to look af­ter their chil­dren.

On av­er­age, those af­fected are miss­ing out on €35 a week, and won’t ben­e­fit from the €5-a-week pen­sion hike un­veiled in this week’s bud­get. Yes­ter­day, Tá­naiste Frances Fitzger­ald pledged to end the dis­par­ity for new pen­sion­ers by 2020, but said fix­ing the ano­maly would cost up to €300mil­lion.

The Min­is­ter for Busi­ness, En­ter­prise and In­no­va­tion said: ‘It is es­ti­mated that to re­vert to the pre­vi­ous bands from Jan­uary 2018 would re­sult in a cost of more than €60mil­lion in 2018, which would in­crease by an es­ti­mated €10 mil­lion in each fol­low­ing year. It would be ex­pected to cost some €70mil­lion in 2019.’

If back­dated, this would reach about €300mil­lion, she said, adding: ‘Clearly that is a huge sum of money to be found in the cur­rent con­text.’

How­ever, Fianna Fáil TD Niall Collins said men and women were be­ing ‘bla­tantly dis­crim­i­nated against be­cause they were not in the work­force for a num­ber of years’.

He added: ‘The years they were not in the work­force are be­ing used to av­er­age down their con­tri­bu­tions. There is noth­ing com­plex about that.’

Sinn Féin deputy leader Mary Lou Mc­Don­ald slammed the Govern­ment, say­ing it knew full well the con­se­quences of the 2012 law change and were con­tin­u­ing to dis­crim­i­nate against women.

She said: ‘[Paschal] Dono­hoe, has de­scribed the sit­u­a­tion as bonkers and un­be­liev­able. What is re­ally bonkers and un­be­liev­able is that he drafted and an­nounced a bud­get on Tues­day that does ab­so­lutely noth­ing to rec­tify this mat­ter.’

But yes­ter­day, Mr Dono­hoe de­nied ever hav­ing pledged to tackle the sit­u­a­tion, say­ing: ‘I had never cre­ated the ex­pec­ta­tion in the run-up to this bud­get that this was go­ing to be a mat­ter that I was go­ing to be able to deal with.’

In a state­ment yes­ter­day, the Depart­ment of So­cial Pro­tec­tion con­firmed that a ‘to­tal con­tri­bu­tion ap­proach’ would re­place the ‘yearly av­er­age’ by 2020, but it was ‘not en­vis­aged’ that this would retroac­tively ap­ply to cur­rent pen­sion­ers. The de­ci­sion not to change the sys­tem has been crit­i­cised by the Na­tional Women’s Coun­cil of Ire­land, which is call­ing for the pay­ments to be fully back­dated.

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