STATE PENSION REFORMS IN THE PIPELINE

÷ WHAT OTHER CHANGES ARE IN STORE FOR THE STATE PENSION?

A new state pension

— known as the Total Contributions Approach

(TCA) — is due to be rolled out in full later this year.

Under this system, the total amount of social insurance contributions paid by, or credited to, an individual — rather than the timing of them — will determine the rate of state pension they are entitled to. The system includes a new HomeCaring credit to give more parents credit for time taken out of the workforce to rear children — and so improve their chances of qualifying for the full state pension.

Some key decisions have yet to be made about the TCA pension before it is rolled out in full — in particular, the number of years’ social insurance contributions which will be required to qualify for a full state pension. There is concern that many workers who get the state pension for the first time will not qualify for the full pension under the TCA if they need to have paid 40 years’ social insurance contributions to get it.

“No decision has been taken on the minimum number of contribution years required for the full state contributory pension [under the TCA],” said a spokeswoman for the Department of Social Protection.

÷ WHEN WILL THE NEW STATE PENSION KICK IN? Some pension experts believe it will be 2022 before the TCA is rolled out in full, though the Government says it will be later this year.

“The plan has always been to introduce the new TCA by the last three months of 2020 and that plan remains unchanged,” said the spokeswoman for the Department of Social Protection. The department currently examines if an individual due to get the state pension for the first time is better off financially under the old state pension or the TCA; with the individual then offered the better of the two. Once the TCA system is rolled out in full, however, anyone getting the state pension for the first time will receive it under the TCA. There will no longer be an option to receive it under the old system.

So, many of those who reach state retirement age in the coming years could lose out — though, equally, many pensioners will be better off under the TCA than the old system.

÷ WHAT IF I FACE WAIT FOR PENSION DESPITE ELECTION PROMISES? Those who retire at 65 can currently claim the dole (jobseeker’s benefit or jobseeker’s allowance) until they reach state pension age — which is now 66. If the pension age increases to 67 next year, under the current system, the dole would still be able to be claimed up until the age of 67.

“The duration of jobseeker’s benefit and jobseeker’s allowance will naturally adjust in line with increases in state pension age,” said the Department of Social Protection spokeswoman.