Éamon Ó Cuív demands end to averaging in pension calculations

Minister, at the moment what you have is both a total contribution system and an averaging system, but the averaging system must be abolished. Can you tell us are you going ahead with abolishing the averaging system for calculating pensions, which in many cases is more favourable than the new system you introduced, and what date will that happen, and when will the contributive pension age increase from 66 to 67? People deserve to know. The introduction of the Total Contributions Approach, TCA, to establish the level of entitlement for all new state pension contributive claims was signalled by the then government in the National Pensions Framework in 2010. At that time, it set a target date of 2020 for the implementation of this new Total Contributions Approach. More recently, the Roadmap for Pensions Reform 2018 to 2023, that we launched on a very snowy day here last year, targeted implementation of the Total Cons Approach from Quarter 3 in 2020. This is subject, obviously, to the necessary legislation being enacted and the support structures in our IT system being in place. I believe consultation is a very important part of the development and design of our new pension for the next generation. I think with this in mind, I launched a public consultation on the proposed new design of TCA on 28 May 2018, to which a wide variety of stakeholder groups were invited. A number of workshops were also held on the day to elicit views and feedback. Shortly afterwards, Oireachtas members were invited to a very detailed briefing by the officials in my department here in Leinster House. The consultation was open for over three months, and the department received almost 300 responses from both individuals and representations and organisations. Those submissions outlined the views of respondents on the issues that were most of interest to them. We have carefully examined the outputs of the consultation process, so now in the department we are designing the scheme, and I intend to bring a proposal to government setting out the design in the very, very near future. When the government has agreed the approach to be taken, I will initiate the work required to introduce this reform. In relation to the State Pension Age, the purpose of reform in this area is to make the pension system more sustainable in the context of increasing life expectancy. If there is no change in the State Pension Age, the proportion of a person's life spent in retirement will increase to levels where current workers will no longer be able to support the current pensioners. The Social Welfare and the Pensions Act of 2011 provided that the State Pension Age will be increased gradually to 68 years. This began in 2014 with the abolition of the State Pension transition payment. This measure standardised the State Pension Age for all of us to 66 years, and this will increase to 67 on January 1st of 2021, and to 68 on January 1st of 2028. Mr. Prime Minister, will you confirm to the House that in the proposals that the previous government, the Unified Government, had brought forward, they were talking about a total contribution record based on 30 years, and that since you have introduced the 40 years, in fact a lot of people are going to be worse off on the system that you are bringing in than they are under the averaging system at present. Can you confirm whether you have calculated the difference between a 30-year total contribution and credits for 30 years, as opposed to what you have actually done for 40 years, and that this has significantly changed the goalpost in relation to transferring from an averaging system to a total contribution system? Mr. Prime Minister, I certainly can confirm to you for the record of this House that the proposal that was issued in the very early days of 2010 by your own government, Fianna Fáil, was 30 years. What I certainly can't confirm to you is your assumption of what my design is going to look like, because I haven't got it approved by Cabinet yet, and so therefore it hasn't been announced, and it certainly hasn't been socialised, and so what I'd ask you to do is to respectfully wait until I do get government approval for the design, but yes Deputy Curran, I'll be out hot-footed in my boots and all that day to make sure that I publish the design, and I very much will value your input thereafter. Mr. Prime Minister, I think that for the reviews, for the people who are disadvantaged by the 212 change, that you are working on a 40-year cycle, not a 30-year cycle, year cycle and will they be entitled to a further review if you introduce a 30 year cycle? I think that that would be very very interesting because the number of people can you also confirm that the number of people who have benefited from your change has been about 30% of the people reviewed and that most of those have not benefit to an equal amount to the amount they lost by the change introduced by your predecessor Deputy Barton. The 40 years TCA 2012 and TCA 2020 would potentially bear no resemblance to each other whatsoever and so again I'll ask for your patience and your indulgence to when I bring the design to cabinet as soon as that cabinet meeting is over you will know as much on that day as I know today and don't fall into the trap of making the assumption that it's going to be exactly the same but I'll also refer back to you is that TCA 2012 bears no resembles to the caring credits that were introduced by your government previously and so I'm actually quite pleased with the results of the review of the 92,000 people that we have because some 54,000 or 54% of our women who were the people that were potentially maligned by the caring credits in the past and were the lack thereof had received an increase in their payment to a full pension and all of the other women stayed on exactly the same money that they were on before and some 24% of our gentleman folk received an increase during that review and obviously the remainder of men couldn't access the caring credit because potentially they weren't caring and so I'm quite happy with the learnings from that review it certainly has fed into the design of the new 2020 proposals which I do genuinely hope to be able to bring to the cabinet in the very near future