Sunday 22 July 2018

'Bonkers' pension anomaly will take years to resolve

No quick fix: Social Protection Minister Regina Doherty. Photo: Tom Burke
No quick fix: Social Protection Minister Regina Doherty. Photo: Tom Burke
Kevin Doyle

Kevin Doyle

The "bonkers" pension anomaly that sees tens of thousands losing out on up to €35 per week will take years to address.

Officials in the Department of Social Protection are in the process of drawing up solutions to the issue - but sources say it will have to be resolved "in tranches".

Around 42,000 people are missing out on a portion of their pension payments because they opted out of the workforce for a period.

Changes to how pension entitlements are calculated, made in 2012, have particularly impacted on women who took time off to raise a family.

Reports last week had suggested Social Protection Minister Regina Doherty would be in a position to "fix this issue in the coming weeks" - but sources have told the Irish Independent there was "no quick fix".

It was expected the minister would bring a memo to Cabinet today outlining a way forward; however, this has now been delayed.

Comments: Finance Minister Paschal Donohoe. Photo: Collins
Comments: Finance Minister Paschal Donohoe. Photo: Collins

Sources say the memo needs to deal with two problems: Firstly, how to end the anomaly without creating new complications and, secondly, how to pay for any resolution.

Once Ms Doherty's officials have answered the first question, she will have to enter negotiations with Taoiseach Leo Varadkar and Finance Minister Paschal Donohoe about funding. Any decisions would then have to be cleared with the Independent members of Government.

In the Dáil last week, Ms Doherty appeared to leave open the possibility of making some moves in 2018 but said she did not want "to make a commitment in that regard right now until I know exactly how much it will cost".

However, sources now say: "We are talking about next year's budget. The ultimate fix will take a couple of years."

Revert

It is estimated it would cost as much as €70m to revert to the old system next year - but to resolve the problem entirely would cost another €180m.

While the issue did not feature heavily in the pre-Budget negotiations last month, it became a major talking point when Mr Donohoe described the anomaly as "bonkers" when the issue was raised by a caller to RTÉ's 'Today with Sean O'Rourke' programme.

Irish Independent

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