42,000 to receive refunds over pension cuts

The Government has to approve measures next week which will see 42,000 people hit by “bonkers” pension reductions refunded, the Irish Examiner can reveal.

Social Protection Minister Regina Doherty has “guaranteed to fix” the pension anomaly, which has seen women and men who took time out of their careers hit with reduced pensions of up to €1,500 a year, because of a 2012 rule change.

Ms Doherty has confirmed that she intends bringing a memorandum to Cabinet on Tuesday “which will fix this issue in the coming weeks”.

Ms Doherty is awaiting an actuarial overview of what is possible and, according to sources, she is intending presenting Cabinet with one solution for approval as opposed to a range of options.

“The report that my officials are working on, I have a report which will be ready to go to Cabinet on Tuesday that will give us solutions to this issue, so that we won’t be sitting here next year with another 7,500 people disadvantaged,” said Ms Doherty. “We will fix this issue in the coming weeks. That was a guarantee I gave.”

The Department of Social Protection has estimated that it would cost as much as €70m to revert to the old system next year and €290m in total to resolve.

Ms Doherty and her officials had sought to bring the memo to Cabinet this week but it was not ready.

“The reason for the delay, from yesterday and over the next couple of days, is that some of the suggestions will create other anomalies,” she said. 

“When we address one issue, we could find another needs to be addressed. Perhaps another, perhaps two steps removed, will bite us.”

On Budget day, a figure of 36,000 people affected was quoted by Ms Doherty’s department but updated figures released yesterday now put it at 42,000. 

She said the figure is likely to go up every year until this matter is addressed.

Despite Ms Doherty’s “guarantee”, senior Department of Finance sources were taken aback saying the matter is not yet decided upon, given there are real monetary implications for fixing the issue. Discussions between officials in Ms Doherty’s department and Mr Donohoe’s are “ongoing”.

“It very much depends on how much it costs. Addressing this and the options we choose will involve new money,” Ms Doherty said.

More than 42,000 people, two-thirds of whom are women, have had their State pensions cut by as much as €1,500 a year as a result of changes introduced in 2012.

The pensioners had their pensions cut because of changes introduced to the eligibility criteria for the contributory State pension in 2012.

While those entitled to a full pension have been unaffected by the changes, many of those who would have been in line for smaller pensions lost out.

The issue came to national prominence the morning after the budget, when Finance Minister Paschal Donohoe described the anomoly as “bonkers” but added he did not have enough money to resolve the issue in one budget.

In response to yesterday’s news, Fianna Fáil’s Social Protection spokesman Willie O’Dea said he was glad the issue would be addressed, as he had called for.

Speaking to the Irish Examiner, Mr O’Dea said: “I welcome the confirmation from the minister that this will be addressed and hopefully it will be done so in a timely manner.”

Michael Collins, Independent TD from Cork South West, was critical of the Government’s failure to address the anomoly in one go.

“This is a violation of thousands of women’s rights,” he said. “This is a complete violation of the rights of the women who worked hard in their homes. Many deputies took extra money for themselves in pay reform and €5m has been made available for a PR budget, so money can be found if there is a need, and there is a desperate need to address this issue and to address it properly.”

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