Sunday 19 August 2018

Varadkar: No swift action on women's pensions inequality that leaves thousands out of pocket

Taoiseach Leo Varadkar. Picture: PA
Taoiseach Leo Varadkar. Picture: PA
Cormac McQuinn

Cormac McQuinn

Taoiseach Leo Varadkar has signalled that the Government won't take any immediate action to change pension rules that leave thousands of women out of pocket.

The Government suffered a Dáil defeat this week, after Fianna Fáil tabled a motion calling for a reversal of 2012 measures that brought about inequalities in the pensions system.

But Mr Varadkar insisted the system is too complex to change in a "piecemeal manner".

Fianna Fáil TD Willie O'Dea said women were unduly disadvantaged due to childcare duties and caring for sick relatives, which led to an enforced absence from the workforce and diluted their yearly average PRSI contributions.

However, despite the defeat, Mr Varadkar said that simply reversing the 2012 changes "doesn't bring about pension equality", adding: "It would just change the portion of the full pension would get."

He said the Government will continue with a planned review of the system as part of a longer term plan to address the issue.

Mr Varadkar said it's a "complicated area". He said the contributory pensions are based on the number of PRSI contributions an individual makes into the Social Insurance Fund while they're working.

"So it's never the case that any of the people who are affected by the 2012 pensions would have had a full pension because they didn't pay enough contributions," he added.

Rules

Mr Varadkar said that Social Protection Minister Regina Doherty's department is already working on potential solutions to improve the situation.

However, he said the cost of any change to the rules and implications of any changes on the amount of PRSI that workers currently pay also has the be considered.

"We'd also need to understand how the changes might affect individuals because any time you change the rules people will benefit and people will lose out. So this is never reform that should be done in a piecemeal manner," Mr Varadkar added.

He said Ms Doherty will publish a public consultation on a new approach to how the State's contributory pension is calculated - one based on total contributions a worker makes, rather than the time period in which they made them.

Mr Varadkar said that a fundamental principle that needs to be understood is that contributory pensions are like workplace pensions.

"The pension you get is linked to the number of years you've worked and the number of years you've made contributions into the fund.

"You would never say to a teacher who worked 40 years, and paid 40 years of contributions, that you're getting the same pension as somebody who worked 20, and paid 20 years of contributions, and we can't depart from the contributory principle."

Irish Independent

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