Pensioners who have lost up to €1,500 a year since 2012 will not be compensated for the amounts lost since then, the Government confirmed yesterday.
However, the State will restore full pensions to more than 62,000 people because of a new pension regime that altered the way in which the weekly payment was calculated.
Having secured approval from Cabinet, Social Protection Minister Regina Doherty, said those affected will be entitled to claim the full higher rate of pension starting from March of this year. Yet, payments will not commence until the first quarter of 2019 and she made it clear that no back payments will be made to compensate those who have lost up to €30 per week in the intervening period.
Ms Doherty said the Cabinet has agreed to a new “home caring credit” of up to 20 years and will introduce a ‘total contributions’ approach to ensure people are no longer punished for taking breaks from their career.
There has been public criticism of the anomaly which has seen women and men who took time out of their careers hit with reduced State contributory pensions. This was because of a 2012 law change introduced by the Fine Gael-Labour coalition and then Social Protection Minister Joan Burton.
Tens of thousands of people, many of them women who voluntarily left, or had no choice but to leave, the workforce many years ago to raise families were left with lower valued pensions. Many of those left the workforce before 1994.
According to Ms Doherty, fixing the anomaly will cost €40m in 2018 and up to €70m per year from 2019.
Ms Doherty said the home caring credits will be equitable: “The period of time over which a person paid social insurance contributions will no longer be a key determining factor in a pension calculation.”
Asked what anti-fraud measures will be put in place to protect taxpayers, Ms Doherty said that the State will accept a statutory declaration for those for whom there is a lack of records: “We will accept their bona fides.”
She said the changes will begin from March 30, 2018, which she insists is the earliest she could have done it.
She pointed out that initially it was thought the increased payments would not have been possible until 2019. Responding to criticism that it is unjust that there will be no back payment of pensions, she said that the changes announced today requires more money and she is not in a position to backdate payments, because no new legislation can be retrospective.
The department also confirmed that if a pensioner dies before receiving their arrears, the money will be paid to their estate.
Responding to the announcement, Fianna Fáil spokesman on Employment Affairs and Social Protection, Willie O’Dea, said that while the announcement made by the Minister Doherty regarding the Contributory Pension is welcome, the payment delays are very disappointing: “It would churlish of me to not welcome the U-turn by Minister Doherty. However, the minister and her predecessor had to be brought kicking and screaming to this position.”
Active Retirement Ireland said it is disappointed that the Government has not chosen to reverse the cuts from 2012.
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