Why did women lose out on their State pen­sions?

Grievance goes back decades and re­lates to the ‘bonkers law’ that forced thou­sands of women out of jobs

The Irish Times - - Home News - Do­minic Coyle

There’s a lot of talk about women be­ing de­nied full pen­sions in the bud­get. Is this some­thing new?

Not at all. In fact, it’s a grievance that goes back decades and re­lates orig­i­nally to the mar­riage bar that forced thou­sands of women out of their jobs in the Ir­ish public sec­tor and pri­vate com­pa­nies, such as banks, when they got mar­ried.

It also af­fects a lot of women who took time to raise a fam­ily or care for rel­a­tives.

And was this sup­posed to be ad­dressed in the bud­get?

It didn’t fea­ture in the bud­get and it was never ex­pected to. The is­sue reared its head when Min­is­ter for Fi­nance Paschal Dono­hoe took ques­tions on a ra­dio show the morn­ing after the bud­get.

Didn’t he call it “bonkers”?

He did. Re­fer­ring to the mar­riage bar, he said: “That was a bonkers law.” He added: “The way those women were treated was wrong. We’re do­ing what we can to rec­tify that.”

So what is he do­ing?

Well, noth­ing. He says he doesn’t have the money that it would take to put it right – about ¤290 mil­lion.

Why are these women be­ing de­nied pen­sions, any­way?

Be­cause they left or were forced out of the work­place for a large num­ber of years, they do not have the min­i­mum num­ber of PRSI “stamps” or con­tri­bu­tions to qual­ify for a full State pen­sion. Some may not qual­ify at all.

That all sounds messy. How do they work it out?

The rules on the State pen­sion are quite rigid. In sim­ple terms, to de­ter­mine whether you qual­ify, the Depart­ment of So­cial Pro­tec­tion tots up the num­ber of PRSI pay­ments or “stamps” you paid, or had cred­ited, dur­ing your work­ing life. They then di­vide the num­ber of stamps by the num­ber of years you worked.

And then?

In or­der to get a full State pen­sion, you need to have paid a min­i­mum of 520 con­tri­bu­tions over your work­ing life, as well as an av­er­age of 48 PRSI pay­ments a year. Peo­ple with a lower av­er­age can get a re­duced pen­sion as long as they have at least 10 pay­ments a year.

And they count the time you were not in the work­force?

They count ev­ery­thing. If you take a stu­dent job at 18, they will count every year from then un­til you re­tire, re­gard­less of breaks you might take. With the re­tire­ment age now 66, that’s 48 years. You’d need to have worked at least 10 full years to meet the min­i­mum 520 con tri­b­u­tion thresh­old – and more than 44 years to get a max­i­mum pen­sion.

Aren’t women given a PRSI “hol­i­day” for rais­ing a fam­ily?

They are now, but that came in only in 1994. Since then, women can dis­count up to 20 years of their work­ing life­time to raise chil­dren – re­mov­ing those years form the av­er­ag­ing for­mula. Any­one rais­ing chil­dren be­fore 1994 lost out.

How many peo­ple are af­fected?

It’s dif­fi­cult to say. The Na­tional Women’s Coun­cil of Ire­land, which has cam­paigned tire­lessly on their be­half, fig­ured in 2007 when mulling a le­gal chal­lenge that up to 130,000 women were af­fected. Other fig­ures sug­gest the num­ber af­fected by the mar­riage bar alone is about 47,000.

But if they were work­ing in the public sec­tor, they wouldn’t have been get­ting the State pen­sion any­way?

That’s quite true for most of them. Public ser­vants em­ployed be­fore 1995 were not en­ti­tled to the State pen­sion, although they did re­ceive a public-sec­tor pen­sion. Clearly, a woman forced to give up her job early in her ca­reer un­der a mar­riage bar would not have much public sec­tor pen­sion en­ti­tle­ment built up.

And, of course, many women were forced out of pri­vate-sec­tor jobs too, es­pe­cially in the banks.

And what hap­pened in 2012? I keep read­ing about changes then that made things worse.

Two things hap­pened. First, the min­i­mum num­ber of con­tri­bu­tions new ap­pli­cants for a pen­sion were re­quired to have dou­bled to 520.

Sec­ond, even more im­por­tantly for women, a num­ber of new bands for re­duced con­tri­bu­tions were in­tro­duced – ef­fec­tively cut­ting up to ¤30 a week of the State pen­sion that some peo­ple had ex­pected to re­ceive.

Be­tween them, these mea­sures were pro­jected to save the ex­che­quer ¤45 mil­lion a year. But, ac­cord­ing to Age Ac­tion, it means more than 22,000 women were worse off by up to ¤1,500 a year.

‘‘In or­der to get a full State pen­sion, you need to have paid a min­i­mum of 520 con­tri­bu­tions over your work­ing life

Why not re­verse these mea­sures at least?

Tá­naiste Frances Fitzger­ald said in the Dáil yes­ter­day that re­vers­ing the changes would cost ¤60 mil­lion next year and ¤10 mil­lion a year there­after. Pay­ing back the money in­volved could cost ¤230 mil­lion, she said.

She said, how­ever, that the is­sue was be­ing stud­ied as part of an over­all review of women’s pay and ac­cess to pen­sions.

She said there would be some rec­om­men­da­tions later this year and a change in the method of pen­sion cal­cu­la­tions would be im­ple­mented after 2020, though she didn’t say what that would be.

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