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
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
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.