Our pensions system is not fit for purpose p22

IT is “bonkers and unbelievable” that women have such limited access to State pensions. These are not my words, or the words of any of the National Women’s Council of Ireland’s members, but those of the Finance Minister Paschal Donohoe.

Lack of access to pensions is a critical issue for women in Ireland, and one that affects many families throughout the country.

The “bonkers” situation referred to by Mr Donohoe is the reality for tens of thousands of women, who get smaller pensions, or sometimes no pension at all, because they took time out of the workforce to care for their children. The gender pension gap in Ireland is an unacceptably high 37pc.

The National Women’s Council of Ireland (NWCI) receives calls every week from women who are shocked that, after contributing so much to society, they reach pension age and find that they have limited or no entitlement to the State pension.

This week, following the huge interest in the issue after the Budget, we have been inundated with calls.

Women’s limited access to the State pension comes about because of a number of reasons. The Marriage Bar, which meant that women had to give up their civil service jobs when they got married, is one. Another reason is simply that the pension system in Ireland is based on a male breadwinner model, which assumes that a person will be in full-time paid employment for their full working lives. It is a system poorly designed to support individual entitlement, or to recognise the care work which women carry out. Our pension system is not fit for purpose as it does not recognise that women’s employment participation is characterised by periods out of the workforce to care and a combination of full and part-time work across her lifecycle. As a result, it does not provide a decent independent income for women.

Rather than address these inequalities, the Government has allowed them to deepen in recent years by increasing contributory thresholds and making it even harder to purchase voluntary credits. Furthermore, efforts around closing the gender pension gap have focused on encouraging women’s enrolment in private pension schemes, which misses much of the point. The 2012 changes to contribution bands to State pensions significantly reduced many women’s access to full pensions and further widened the gender pension gap. It is estimated these changes impacted on 23,000 women. The cost to reverse this decision is ¤60m and one which was affordable in Budget 2018.

The National Women’s Council, alongside Age Action and the Irish Countrywomen’s Association, campaigned for Budget 2018 to increase women’s access to State pensions, but this did not happen. The Government has acknowledged just how unfair the situation is and it is now the Government’s responsibility to fix it.

This is a problem with clear solutions. The Government should immediately reverse the 2012 changes. The messaging around Budget 2018 was very much about putting more money in people’s pockets, yet while the increase to the State pension is welcome, many women will not receive this increase as they do not qualify for the full pension. Before we can talk about ensuring a modest sustainable rise in women’s living standards, we must first acknowledge and fix the inequalities they face.

Another long-standing issue for recognising care work in the pension system is the Homemakers Scheme, which provides for women taking time out to care but only applies retrospectively to 1994. This leaves many women forced out of work by the Marriage Bar with insufficient and unfair pension entitlements. The minister must now backdate the Homemakers Scheme to 1973 and, as recommended seven years ago in the National Pensions Framework, replace the Homemakers’ disregard with credits. In addition, all people should receive a regular statement to inform them of their pension contributions and a forecast of their future pension entitlement.

In the longer term, we need to make our pension system work for women, so that future generations do not face these issues. This means a universal pension system, which reflects the realities of the modern lives of women and men, and would remove the need for contributions, thereby treating women and men equally. It would give both women and men equal access to a comprehensive pension guarantee.

NWCI has worked with women throughout Ireland on this issue, and campaigned for many years. Women should not have to experience the loss of independence and feelings of being a burden that come with being forced to survive on inadequate State pensions. It is time to change this “bonkers and unbelievable” situation. Older women have waited long enough. It is imperative that the Government introduces a fair and equitable pension system that ensures women and men can have a decent standard of living in their older years.

‘Rather than address these inequalities, the Government has allowed them to deepen in recent years’

Orla O’Connor is director of the National Women’s Council of Ireland (NWCI), Ireland’s largest women’s membership