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Concerns over 40-year target to qualify for state pension

Concern about plans to reform the state pension has been raised by the Irish Congress of Trade Unions.

The Government is proposing that 40 years of social insurance contributions will be required to qualify for a full pension.

Congress social policy officer, Dr Laura Bambrick, said a 40-year target failed to take into account the impact of legacy issues still evident in the contribution records of workers nearing pension age.

“Comprehensive social insurance coverage is less than 30 years in place which will negatively impact on the potential of older workers to accumulate the number of contributions proposed to receive the full payment,” said Dr Bambrick.

Minister for Employment Affairs and Social Protection, Regina Doherty, will launch a public consultation on state pension reform today. It will help inform the design of Ireland’s total contributions approach to pensions that will come into effect in 2020.

Regina Doherty

Ms Doherty confirmed that the “interim” option of a total contributions approach for people who reached pension age after September 1, 2012, would be legislated for later this year and shortly afterwards her department would be writing to pensioners who might benefit from the reform, informing them of the steps they need to take.

As well as seeking a reassessment of their pension, they can claim the new HomeCaring Credits that are part of the new system. The credits will allow people to count up to 20 years spent taking care of their family as part of the 40 years’ pensionable service they will need for a full state pension.

To mark the launch of the consultation that runs until September 3, the department is holding a seminar for interested parties, including ICTU.

Earlier this year, Mr Doherty announced that post-2012 pensioners adversely affected by rate band changes could have their pension entitlement calculated by yearly averaging or total contributions and be awarded the higher pension of either method.

Dr Bambrick said the option to calculate pension entitlement under either averaging or total contributions must remain in place after 2020 for people at a stage of their life where they could do very little to improve their contributions record and who had a reasonable expectation that their future state pension entitlement would not change significantly.