More than 23,000 pensioners who had their pensions reduced after taking a career break to care for loved ones have had their retirement payments increased, the Irish Examiner can reveal.
Social Protection Minister Regina Doherty has confirmed that since the controversy erupted in the wake of the Budget 2018 a major review has been undertaken with over 90,000 cases examined.
Ms Doherty has said that her department has examined the social insurance records of approximately 90,000 pensioners, born on or after 1 September 1946, who had a reduced rate State pension contributory entitlement based on post Budget 2012 rate-bands.
The minister said these payments are being reviewed under a new Total Contributions Approach (TCA) to pension calculation which includes provision for home caring periods.
Ms Doherty has confirmed that, as of last week, 47,755 reviews - which is over half of all pensioners identified for review - have been completed.
Of these, 23,523 pensioners received an increase in their rate of weekly rate of pension and 24,232 are remaining on their existing rate of payment, she said.
Based on a sample analysis of some of the increases awarded, the best estimate at this stage is that 13% of those who received an increase received a weekly increase of €30 or more; 36% received a weekly increase of between €20 and €30; 7% received an increase of between €10 and €20; with the highest proportion, 44%, receiving an increase of up to €10 per week.
“Importantly, most of those who received less than €10 following their review achieved maximum personal contributory pension rate, which cannot be further improved upon,” Ms Doherty said.
The Irish Examiner has learnt that reviews commenced from 13 February 2019, the day after she signed the necessary Regulations which, together with provisions in the Social Welfare, Pensions and Civil Registrations Act 2018, allows the increased payments to be made.
Regardless of when a review is conducted, where an increase in payment is due, the person's rate of payment is adjusted without delay and arrears paid, backdated to 30 March 2018 or the person's 66th birthday if later, the minister confirmed.
Where a person's rate does not increase following review, the person will continue to receive their existing rate of payment.
The Government will have to find €55m next year to cover the cost of fixing the 2012 pensions anomaly relating to carers who took time out of their careers.
On foot of the controversy, the Government decided to allow State pension (contributory) recipients affected by the 2012 changes in rate bands to have their pensions entitlement calculated on a total contributions approach basis.
The changes included a provision for up to 20 years of a new “HomeCaring credit”. This would benefit people whose work history includes an extended period of time outside the paid workforce, raising families, or in a full-time caring role.
According to the report, reviews will commence in the final quarter of this year, with the first payments being made in the first quarter of 2019. It is estimated the full-year cost will be in the region of €35m.
“Backdating to March 2018 will cost an estimated €20m, resulting in a 2019 cost estimated at some €55m. This is not currently included in the [department’s] 2019 ceiling,” the report said.