Significant improvements to pension outcomes for homemakers and carers
Cork Senator, Tim Lombard, has said there will be significant improvements to pension outcomes for homemakers and carers who were affected by rate band changes in 2012.
The new Total Contributions Approach will calculate pensions based on all contributions made over a working career. There will also be provision for a new Home Caring Credit of up to 20 years to assist workers who took time out to raise families. The new system will be implemented from the 30th of March, and payments to eligible pensioners will be backdated to this time.
Senator Lombard said: “In recent months, many people expressed concern to me about their pension rates, which were affected by rate band changes in 2012.
“I have been in constant communication with my Fine Gael colleague, Minister for Employment Affairs and Social Protection, Regina Doherty on this issue, highlighting the concerns of Irish pensioners.
“Minister Doherty has been working with her Government colleagues to find a solution to this issue and today, the Government has agreed to allow post 2012 pensioners to choose between their current rate and that to be introduced under the Total Contributions Approach.
“This approach is expected to significantly benefit many people, particularly women, whose work history includes an extended period of time outside the paid workplace, while raising families or in a caring role.”
Senator Lombard continued: “Later this year the Department will invite over 40,000 pensioners, currently assessed under the 2012 rate band changes, to have their pensions recalculated under TCA to determine if they qualify for a higher rate of entitlement.
“As it will take time to design and set up administrative processes, and the necessary IT systems, the Department expects to send out the invitations from Q4 2018.
“Pensioners do not need to contact the Department or do anything else until written to by the Department nearer the end of the year. The first payments will be made from early 2019, with payment backdated to the 30th March 2018.
“The TCA will ensure that the totality of a person’s social insurance contributions – as opposed to the timing of them – determines a final pension outcome.
“No existing pensioner will see their pension reduced by this change- if their rate is improved by the TCA calculation option they will benefit, but if their TCA calculation entitlement is lower, they will remain on their existing rate.
“I am delighted that this new model will help build a sustainable future for those pensioners in Cork who took time outside the paid workplace, while raising families or in a caring role.”
23 January 2018