Submission 276
May 08
Green Paper Submission
The conditions for old age/retirement (i.e. contributory state pension) include rules about average contributions paid since entry into insurance. These rules can have serious effects that affect females and returning emigrants generally more than males and those who stayed at home, possibly unemployed.
The system needs to deal more effectively with the realities facing many women who had and still have to work part-time or intermittently because of the important duties they undertake as mothers and homemakers and indeed they undertake a disproportionate share of caring.
After a lifetime of juggling work and home duties they get clobbered by social welfare average contribution conditions that were probably acceptable in Bismarck’s time but which were already becoming outdated in 1953. And the situation is getting worse not better for those women who tried to put a little in a pension plans when they were working because the pensions system only really serves the wealthy who can put millions into pension plans.
People with fragmented pension plans face all kinds of difficulty when they retire and so called advisers are powerless, or maybe not just interested, when the insurance companies insist on penalising these women in numerous ways.
One simple thing the Minister could do, and there is a precedent for it, would be to revise the alternative average contribution test to apply from 1988 when PRSI for the self-employed was introduced. The concept of using an average based on relatively recent years was adopted in 1992 mainly for administrative reasons, I believe that the cost was negligible when administrative savings, increased tax take and switching from means tested pensions were put in the balance. It should now be adopted on grounds of equity and equality for female contributors.
A start could be made with by using 1988 instead of 1979 as the base year for average contribution conditions for married women immediately and then look at the implications, in cost terms, as well as in equity in result, of taking a more daring approach such as having an average test based on the last 10 years where, at a minimum, the person can demonstrate that she is losing pension because she had to emigrate or assist on family farms etc, undertook substantial periods in homemaking or in assisting family businesses and were thus unable to pay social insurance on their own account and is thereby facing a reduced benefit because of the extended averaging rules
Similar considerations would also arise in relation to males who felt compelled to emigrate and having returned to Ireland in recent years also face reduced or nil pensions because of extended average rules
