Saturday 24 March 2018

Nine-fold hike in women hit by 'unfair' pension cut

Former Labour Party leader regrets changes to pension contribution system

FF’s Dara Calleary wants anomaly addressed. Photo: Gareth Chaney Collins
FF’s Dara Calleary wants anomaly addressed. Photo: Gareth Chaney Collins
Philip Ryan

Philip Ryan

There has been a massive nine-fold increase in the number of retired women receiving cut-rate pensions since the Government introduced new rules which slashed payments five years ago.

New figures from the Department of Social Protection also showed the highest number of women affected by the controversial pension cuts were in Dublin, Cork, Kildare and Limerick.

The Government came under pressure last week for using the Budget to address the pension anomaly which means retired women who worked at home receive as much as €50 less than those on full State pension.

Minister for Finance Paschal Donohoe called pension rules penalising women for leaving the workforce to care for children "bonkers", but said he did not have the financial resources to address the legislative loophole.

Fianna Fail public expenditure spokesman Dara Calleary said his party would insist on the anomaly being addressed in next year's Budget negotiations.

During his Budget speech last Tuesday, Mr Calleary raised the issues faced by thousands of women and said it should be a priority.

"Many of these are parents who made the decision to take time out of the workforce to raise their families and now find themselves been penalised for doing so.

"This is unfair and we must outline a path to reversing it," he added.

Meanwhile, figures obtained by Mr Calleary show 515 women were affected by the modifications to the pension system when it was first introduced in 2012 following changes to payments implemented by former Minister for Social Protection Joan Burton.

Last year, this rocketed to 5,445 women receiving reduced payments due to the change in how pensions are calculated.

The numbers affected by the cut-rate pension is expected to increase dramatically in the years ahead due to an ageing population.

The most recent figures available show that 42,500 people received a reduced rate pension as a result of the rate band calculation changes implemented in 2012.

Just under 62pc of those affected were women while 38pc were men.

Women were penalised before Ms Burton changed the pension contribution system in 2012, but the payments were reduced further due to the changes made by the former Tanaiste.

Last Friday, the former Labour Party leader said she regretted bringing in the cut which meant woman received cut-rate pensions and urged the Government to address the problem.

Social Protection Minister Regina Doherty has been consulting with her officials about addressing the issue this year but senior government sources said it was highly unlikely anything would be done.

It is estimated the cost of reverting the arrangement that existed after 2012 would be over €60m in 2018.

To fix the overall pension anomaly issue faced by women, which dates back to before 1994, would cost the Government an estimated €290m.

Ms Doherty is already understood to be struggling to find funding for the measures to help lone parents who are living near the poverty line which she introduced in the Budget.

Sunday Independent

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