Donohoe: Never any Budget plan to fix ‘injustice’

The Finance Minister claims he never signalled he would address the “gross injustice” around women’s pensions as part of Budget 2018.

Tens of thousands of women who were impacted by the marriage bar, or who took time out of work to care for children, sick or elderly relatives now feel “cheated” that their pensions have been cut.

It is also being claimed that the reduction in pensions payments is exacerbating rural isolation.

Finance Minister Paschal Donohoe yesterday said the issue had been raised with him for “many months” but added: “I had never created the expectation in the run-up to this budget that this was going to be a matter that I was going to be able to deal with.”

The Dáil yesterday heard that pensioners could have to wait until at least 2020 until Government begins to address the inequalities, which will cost around €290m.

Cathy McKeefry of the National Collective of Community Based Women’s Networks said the cuts to pensions are leaving many women isolated.

“€35 is a lot to be down in a week,” she said. “When you are living in rural Kerry, for example, it is a full week’s diesel. There are all of these policies and programmes that have been announced to combat rural isolation but if women are down money even if there are different organisations who are putting on events, they don’t have the money to put diesel in their car to attend and it’s further isolating them.

“Women are angered by the total unfairness of it all.”

Ms McKeefry was among 13 women who travelled to Dublin ahead of the budget to lobby TDs on the issue.

“They were all extremely supportive of it,” she said. “It doesn’t make sense to women who took a few years of their life to mind children or elderly people and they are falling foul of decisions that were made in 2012.”

Workers, mainly women, who left work to care for young or sick in the home, are now being penalised as their PRSI contributions are averaged out from when they first began working.

While the homemakers’ scheme means that, after 1994, time taken out of employment to care for children or the elderly is disregarded when calculating pensions, this does not apply prior to that date.

The anomalies were made worse by changes introduced in 2012 by then Social Protection Minister Joan Bruton.

The changes mean that some women are losing out on €35 a week, or up to €1,800 a year, in their pensions.

Pensions are calculated on averaged out contributions of PRSI contributions — or stamps as they were previously known — and before 2012 there were four bands for allocation of payments.

However, Ms Burton added two additional bands, meaning that those on lower contributory pensions have seen their payments reduced. For example, while people who had an average of 15 contributions per year for every year worked received 75% of the maximum rate before 2012, they now only receive 65%.

People Before Profit TD, Bríd Smith claimed the rules “must be illegal as they breach the equality legislation and they have to be reversed”.

Green Party TD Catherine Martin said: “Tens of thousands of women are affected by this gross injustice, and the Minister’s platitudes will be of little comfort to them after he failed to even begin to address this issue in Budget 2018.”

The Department of Social Protection said Government intends to replace the current system with the “total contribution approach” (TCA) for new pensioners from 2020.

“The aim of this approach is to make the rate of contributory pension more closely match contributions made by a person,” said a spokesperson.

“Officials in the Department are currently working on the detailed development of the TCA with a view to making proposals for consideration later in the year.”

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