Dáil Éireann Debate, Thursday - 19 September 2024
210. Deputy Paul McAuliffe asked the Minister for Social Protection the estimated cost to the Exchequer of increasing the cap on credits of 20 years in the assessment of pension eligibility under the total contributions approach system by one year, three years, five years and ten years. [37176/24]
View answerEligibility for the State Pension (Contributory) (SPC) is based on a number of criteria:
• Being aged 66 or over.
• Having entered the Social Insurance system 10 years before you intend to drawdown your SPC.
• Having a minimum of 520 paid social insurance contributions (i.e., 10 years reckonable PRSI contributions).
It should be noted that having 10 years of paid social insurance contributions is only the minimum requirement to qualify.
Under the Total Contributions Approach for calculating the SPC, the total number of paid contributions can be supplemented by up to 20 years of credited contributions. These credits can take the form of HomeCaring periods (maximum of 20 years) or ordinary credits (maximum of 10 years) for reasons such as unemployment or illness. The total combined credits cannot exceed 20 years (i.e. if a person has 15 years HomeCaring periods and eight years ordinary credits, they will get a maximum of 20 years credits).
To receive the maximum rate of payment, a person needs a total of at least 2,080 contributions and credits combined (equivalent to 40 years). If the total is less than 2,080, the rate of payment will be a percentage of the maximum rate of pension. For example, a person may receive a maximum pension based on a record of 20 years paid PRSI contributions, 5 years jobseekers’ credits, and 15 years HomeCaring credits (before or after 1994).
The existing provision of up to 20 years credited periods is a very generous one, having regard to the fact that 40 years contributions are required in order to receive a maximum rate of payment.
Since January 2024, long-term carers contributions (LTCCs) can be awarded to a person who has cared for an incapacitated person for a period of 20 years (1040 weeks) or more and these contributions can be used towards the calculation of their SPC entitlement. This is done by attributing the equivalent of a paid contribution to long-term carers of incapacitated dependents to cover gaps in their contribution record. These long-term carers contributions will be treated the same as paid contributions for SPC entitlement only and can, where there are gaps in paid contributions, be used to satisfy the minimum 520 qualifying contributions condition. Once a person has 20 years or more caring for an incapacitated dependent, there is no limit on the number of years of LTCC's they can have awarded for their caring role.
The long-term carers' contributions can be used in conjunction with other paid or credited contributions to increase a person’s rate of payment.
It is not possible for the Department to give an overall estimate of the cost of the measures proposed by the Deputy as the Department cannot determine accurately the number of persons who may be awarded credits when drawing down their SPC at a future date.
I trust this clarifies the matter for the Deputy.
