Pensions – Consultation on State Pension Policy

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Pensions are important to us all. The Government is making proposals to change how the contributory state pension is calculated. The total contributions approach is a way of assessing and calculating a person’s eligibility for a full State pension. Government plans proposes that the current system of yearly averaging be replaced with a Total Contributions Approach from 2020.

A number of stakeholder organisations, including the National Women’s Council of Ireland, have been invited to submit. Individuals may also have their say through an online questionnaire at PENSIONS SURVEY 

Other documents you may wish to view:

DEASP_TCA_Consultation_Document                                   Pensions_PolicyOptionsReporton2012RateBands

This process closes on Sept. 3rd 2018.

 

Pensions Submission from NWCI

The National Women’s Council of Ireland are preparing a detailed submission and you are invited to share your thoughts, comments or support with them. An outline of their proposals may be seen below.

NWCI Pensions Response:

We argue for direct personal access to pensions for all women, which take into account the important role women play in providing unpaid care. An universal pension system which gives both women and men equal access to a comprehensive pension guarantee is that the best way to support equality in older age.  In the interim, there are gaps and inequities in the first tier of our pension social insurance system which need urgent attention and which should have greater priority than any new or supplementary tier.

We further argue that at least some and arguably a significant proportion of the €2.39b currently spent on private tax relief, the majority of which goes to high earners and men can be reinvested in first tier state pensions.  We note that this funding option is not considered to fund a universal pension in the DEASP 2018 TCA consultation  document even though the additional  €1.3 billion per annum is within the pension tax relief envelope ad would general considerable impacts on gendered pension gaps.

Governments Proposal NWCI Response/Concerns
Consultation process The format of the consultation process is not helpful – standalone submissions allow fuller consideration of the key issues rather than closed survey questions. The meaning of some survey questions is not clear.  A roadshow was promised to engage more people in the consultation and this has not happened.
40 qualifying years (2080 contributions in total) will be required for a full pension of €243.30 pw 30 years as was originally proposed by the government in their National Pensions Framework. This would be much fairer for women The implications of changing this period need to be carefully considered through carrying out a gender impact assessment of the TCA as committed to in the National Strategy for Women and Girls.
The new calculation method will be introduced for all applicants reaching pension age from January 2020 onwards Flexibility may be required for women who have not been able to build up sufficient contributions
A 10 year(520 contributions) cap on the credits awarded for gaps in employment over an applicant’s working life due to specified circumstances such as unemployment We are concerned that when ordinary credits are used they will reduce the maximum number of HomeCaring Credits that can be used, e.g. if you have 7 years Jobseekers credits, you can only use another 13 years homecaring credits, the combined maximum is 20.
20 years credits(1040 contributions) for caring for your own children up to age 12 or for a sick relative of any age We welcome the introduction of the homecaring credit. However longer periods of caring must be recognised in the final design of the TCA to recognise carers of children with disabilities who may require a life time of care. This practical recognition of the social and economic contribution of care should also serve as a Re-Entry credit, ensuring that those looking to re-enter the workforce after a period spent caring can access training, educational or employment supports from their local Intreo office.
Retaining the minimum paid contributions test of 10 years(520 contributions) for a reduced pension Long-term carers may not have the minimum 10 years of contributions that is required to qualify for the SPC.  Individualization does not apply in means testing for the non-contributory pension so a carer could potentially receive neither pension in their own right.

Explore removing a paid contribution condition for credits as in the UK.

Benchmark the payment rate at 34% average earnings and index future increases in the pension to increases in wages and prices Income certainty is crucial. Indexing must allow for women’s longer life span. An adequacy benchmark of 50% net average industrial earnings would ensure quality of life and ensure pension income standard would increase in line with average living standards and earnings.
The qualifying pension age will increase to 67 in 2021 and to 68 in 2028. There will be no further increases prior to 2035. Thereafter changes will be linked to life expectancy. Ireland has the highest effective retirement age in Europe. There has been no gender or poverty analysis of increases in age for eligibility for the state pension, this one size fits all approach does not take into account inequalities within the workforce in terms of horizontal segregation of women in low paid sectors, women predominating in part time work and interruptions from building your pension from caring responsibilities.  Women in low pay less likely to have sufficient pot built up to facilitate earlier retirement. Women (and men) with health conditions and/or who are in physically demanding employment sectors need mitigating and transitional arrangements.

 

This is an once in a generation opportunity to influence pension policy. Let your voice be heard!

If you wish to comment on the NWCI submission contact Catherine Lane – catherinel@nwci.ie.

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