Doherty will not bring incomplete pension report to Cabinet

Minister for Social Protection waiting on report into anomaly of reduced pensions

Minister Regina Doherty says she will not bring an incomplete report to Cabinet on the pension anomaly. Photograph: Dara Mac Dónaill/The Irish Times

Minister Regina Doherty says she will not bring an incomplete report to Cabinet on the pension anomaly. Photograph: Dara Mac Dónaill/The Irish Times

 

Minister for Social Protection Regina Doherty says she will not bring an incomplete report to Cabinet on the pension anomaly.

There had been speculation that she would bring a solution to the anomaly to Cabinet on Tuesday.

However, Ms Doherty said she was waiting for a report to be completed which would assess the full extent of the anomaly.

The anomaly has seen women and men who took time out of their careers hit with reduced pensions of up to €1,500 a year, because of a 2012 law change.

Eligibility for the State pension is based on an averaging system, which counts the average number of contributions made each year, with a minimum number required for any pension.

It takes the first PRSI stamp paid as the starting point even when that might be in relation to a part-time student job. Tens of thousands of people, many of them women who left or were forced to leave the workforce decades ago to raise families, are disadvantaged by the current method of assessing the State pension.

Those who took time out of the workforce since 1994 have been able to discount up to 20 years from their working lives for calculating their State pensions, but many of those reaching retirement now would have left work before 1994.

The post-1994 discounting applies only to those who left work to raise a family or to care for relatives. In 2012 the system was changed further, to double the minimum number of contributions required.

More bands were also added, which cut the pension by up to €30 a week, for elderly people with reduced contributions, many of them women.

“It’s wrong that people who worked for a shorter period are getting larger pensions,” Ms Doherty told Newstalk Breakfast.

“We want to fix it, we will fix it. But I’m not going to bring an incomplete report to Cabinet. I want a complete report and a proposal how to fix the anomaly without creating another anomaly.”

The Minister said the Government recognises that this is an issue that affects 42,000 men and women and that the issue needs to be addressed.

“I don’t want to give false hope.”

She said it would be the mid-term before the anomaly is rectified as it will cost “a large amount of money”.

“We are working on it. The how is easier than finding the money. It is not so easy to find out how to pay to correct the anomaly.”

The earliest the issue could be addressed is next year’s Budget, she added.

“But there is a will to fix it.”