Gov­ern­ment needs ‘road map’ to fix pen­sion im­bal­ance

FF says women los­ing out on pay­ments due to ‘un­be­liev­able’ anom­aly Age Ac­tion says 35,000 peo­ple’s pen­sions have been cut since 2012

The Irish Times - - Front Page - FI­ACH KELLY and MICHAEL O’RE­GAN

Pen­sions: Gov­ern­ment

needs to set out a ‘road map’ to deal with is­sue where women are los­ing out on pay­ments:

The Gov­ern­ment needs to set out a “road map” to deal with an anom­aly in the pen­sion scheme that sees thou­sands of women los­ing out on pay­ments, Fianna Fáil has said.

The call from the main Op­po­si­tion party, whose ab­sten­tion is needed to pass the bud­get, comes after Min­is­ter for Fi­nance Paschal Dono­hoe de­scribed the anom­aly as “bonkers and un­be­liev­able”.

Be­cause of changes in­tro­duced by the gov­ern­ment in 2012, the pen­sions of about 36,000 older peo­ple were cut by hun­dreds, even thou­sands, of euro each year, ac­cord­ing to Age Ac­tion Ire­land.

The State pen­sion is cal­cu­lated by adding up the to­tal num­ber of PRSI con­tri­bu­tions a per­son makes and di­vid­ing that by the num­ber of years be­tween when a per­son starts work and when they re­tire.

How­ever, many older women are pun­ished by this sys­tem be­cause they took time off work to raise a fam­ily, dur­ing which time they will not have paid con­tri­bu­tions. It also af­fected oth­ers who had taken up part-time work or had a sum­mer job.

‘Hun­dreds of mil­lions’

Mr Dono­hoe has said it would cost “hun­dreds of mil­lions” to rec­tify in one bud­get and the Gov­ern­ment now says “any changes to this sys­tem are com­plex and po­ten­tial im­pacts need to be prop­erly thought through and costed”.

Min­is­ter for Em­ploy­ment and So­cial Pro­tec­tion Regina Do­herty is work­ing on a new ap­proach to pen­sions, a Gov­ern­ment spokesman said, and will make pro­pos­als later in the year.

“It is then in­tended to have a pub­lic con­sul­ta­tion and this will pro­vide an op­por­tu­nity for peo­ple to sub­mit their views on the pro­pos­als.”

How­ever, Fianna Fáil fi­nance spokesman Michael McGrath, said the Gov­ern­ment had been “pro­cras­ti­nat­ing” on the is­sue.

“The peo­ple who are af­fected want to see a road map back to be­ing treated equally based on their con­tri­bu­tions.”

No im­me­di­ate change is an­tic­i­pated and any fur­ther mea­sures are likely to be an is­sue for next year’s bud­get.

Labour’s Joan Bur­ton de­fended changes made to the pen­sion sys­tem while she was min­is­ter for so­cial pro­tec­tion on the ba­sis that the sys­tem had to be saved at a time of aus­ter­ity.

Ms Bur­ton said the Gov­ern­ment could help those af­fected by in­creas­ing pay­ments to them over a num­ber of bud­gets, be­gin­ning with the forth­com­ing So­cial Wel­fare Bill.

Tá­naiste Frances Fitzger­ald also an­swered ques­tions on the is­sue in the Dáil yes­ter­day.

Re­vers­ing changes to the State pen­sion in­tro­duced in 2012 would cost ¤60 mil­lion next year and a fur­ther ¤10 mil­lion an­nu­ally, Ms Fitzger­ald has said.

She said pay­ing the money back would cost an es­ti­mated ¤230 mil­lion.

“I am acutely con­scious of the prob­lems women are ex­pe­ri­enc­ing in ac­cess­ing ad­e­quate pen­sion pro­vi­sion,’’ she added.

Ms Fitzger­ald told the Dáil yes­ter­day the is­sue was be­ing stud­ied as part of a re­view of women’s pay and pen­sions.

There would be some rec­om­men­da­tions later this year, and a change in the method of pen­sion cal­cu­la­tions would be im­ple­mented after 2020, she added.

‘‘ Any changes to this sys­tem are com­plex and po­ten­tial im­pacts need to be prop­erly thought through and costed

35,000 pen­sion­ers

The Tá­naiste was re­ply­ing to Fianna Fáil’s Niall Collins and Sinn Féin’s Mary Lou McDon­ald, who high­lighted the case of 35,000 pen­sion­ers, two-thirds of whom are women, who have had their pen­sions cut by as much as ¤1,500 a year be­cause of the 2012 changes.

Mr Collins said Age Ac­tion Ire­land had been lob­by­ing on an is­sue which was a gen­der-based in­equal­ity in the main be­cause it im­pacted on women mostly.

“Bear in mind, a lot of women took time out of the work­force to rear their fam­i­lies, look after sick rel­a­tives, el­derly par­ents and look after their home­mak­ing re­spon­si­bil­i­ties,’’ he added.

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