# Minister Donohoe admits pension hit to women is 'bonkers'



## kaiser1 (12 Oct 2017)

Link here - http://www.independent.ie/business/...pension-hit-to-women-is-bonkers-36219507.html

While this highlights the issue for Woman specifically I think it shines a light on the pension rules for everyone who works.
I had summer Jobs well before I began full time employment paying PSRI tax etc, so think its a little unfair that the clock starts ticking for me back then even though I would have gone to third level and been in and out of employment for a while. Now, hopefully I can continue working for quite some time to come and my average will be more than enough to qualify for a full contribition pension when I reach that age.

But is it correct (or right) that if someone never works that they get almost the same pension as someone who has worked all their lives? Would the lady mentioned above have a higher pension if she never worked at all? (under the current rules)

In todays work with many women working we will probably see less of this example happening in the future.

"Over the next few years, we are going to try to move to a pension system, which takes into account the entirety of people's contributions. We're aiming to do that for around 2021."

Hopefully this is a step in the right direction and will lean towards rewarding work rather than punishing those who start employment early.


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## cremeegg (12 Oct 2017)

kaiser1 said:


> I had summer Jobs well before I began full time employment paying PSRI tax etc, so think its a little unfair that the clock starts ticking for me back then even though I would have gone to third level and been in and out of employment for a while.



I worked for a period after school before going to college. I did not work in college. My employer at the time never paid prsi on my earnings. When I discovered this later I thought he was a crook. I now realise he did me a favour.


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## Odea (12 Oct 2017)

cremeegg said:


> I now realise he did me a favour.



Would the Social Welfare even have records going back I wonder?


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## Raskolnikov (12 Oct 2017)

It's funny you should bring this up, I was thinking the exact same thing.

I started working part-time at 15 in 1999 and had a very patch employment status for the next 9 years with lots of J contributions (not counted for the pension) but very few A contributions (these are the ones counted for the pension. For the next 10 years, I have a completely unbroken series of A contributions, ruining my average, just because I was a kid in full time education and I didn't want to be a burden on my parents.

In my opinion, if you are in full-time education, you should receive automatic contribution credits for those period, or else the clock shouldn't start, certainly not while you're in secondary school, and really it shouldn't start when you're in third-level either.

If people are in a similar situation, then I strongly urge you to write, or e-mail Frances Fitzgerald on this matter.


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## Raskolnikov (12 Oct 2017)

Odea said:


> Would the Social Welfare even have records going back I wonder?


They have records going back to 1999 for me. 

If you have a mygovid.ie account, you can check them for yourself at www.mywelfare.ie


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## Raskolnikov (12 Oct 2017)

Just did some calculations on my only person situation. I started work full time at 24 with no gaps since. If I work full-time continuously between now and 67, I will still not have enough contributions under the current system to get the full state pension, despite having 43 years of Class A contributions. 

On the other hand, if someone arrives into the country, starts work at 37, and works continuously until they are 67, they will get the full state pension despite having contributed 13 years Class A stamps than me.


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## Leper (12 Oct 2017)

Hmmmmmmmmmmmmmmmm . . . .mmmm! All children of the state shall be cherished equally . . . . Not so with married women who had to or gave up their jobs to mind their children . . . .


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## Brendan Burgess (12 Oct 2017)

kaiser1 said:


> But is it correct (or right) that if someone never works that they get almost the same pension as someone who has worked all their lives? Would the lady mentioned above have a higher pension if she never worked at all? (under the current rules)



The system is full of anomalies. 

My proposal that a person's PRSI is put into a fund in their own name would get around all those anomalies. The more you work, the more PRSI you put into your fund, and the bigger pension you would get. 

Brendan


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## browtal (14 Oct 2017)

A number of years ago a concession was given to women who were home with children under 12. They were allowed credit for these years. This credit was confined to a special age group. Most older women did not qualify. Surely this breaches the equality legislation?

Also is not treating everybody equally?.
Browtal


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## browtal (14 Oct 2017)

There is very little difference in the rate payed for contributory pension and the non-contributory.
Also if there was a considerable difference would it encourage some people to seek employment who might otherwise might choose not to work.


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## browtal (14 Oct 2017)

My records go back to 1964 which they still hold
 browtal


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## newtothis (14 Oct 2017)

It's a bit off-topic, but did anyone else notice how inaccurate the reporting has been around the use of the term "bonkers"? You would think the Independent (and others) would be able to get the basic facts right: "Finance Minister Paschal Donohoe has admitted it is "bonkers and unbelievable" that women are losing out on pension payments due to a recent change in the rules.". The problem is that this, and consequently the headline, and indeed the title of this thread, is simply not true. What he actually said was that the rule that required women to give up paid employment when they got married was bonkers. That puts a completely different complexion on what was said: the headline implies the Minister is presiding over a system that he himself believes is bonkers, which isn’t the case. But hey, why let the facts get in the way of a good headline?


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## DeeKie (14 Oct 2017)

Raskolnikov said:


> Just did some calculations on my only person situation. I started work full time at 24 with no gaps since. If I work full-time continuously between now and 67, I will still not have enough contributions under the current system to get the full state pension, despite having 43 years of Class A contributions.
> 
> On the other hand, if someone arrives into the country, starts work at 37, and works continuously until they are 67, they will get the full state pension despite having contributed 13 years Class A stamps than me.


That's crazy.


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## Protocol (14 Oct 2017)

Note that the average condition can affect anybody, not just women.

You can suffer if you start paying PRSI early, and subsequently have a less than full record.


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## Protocol (14 Oct 2017)

The Homemakers scheme was introduced in 1994, and allows up to 20 yrs to be disregarded for pensions purposes.


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## Bronco Lane (15 Oct 2017)

Wollie said:


> We could have transferred most of our joint savings into my name, but it would demean her, so we decided not to claim the benefit. As a consequence, all we get is my single person's OAP.


I suppose you have to decide if circa €124k over a 10 year period is worth demeaning yourself for. 
Can a person claim the pension after age 66?  In other words if you had a change of heart or change of financial circumstances can you claim your pension at anytime past age 66?  For example if children were given their inheritance early?
Would the pension be backdated?


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## mathepac (16 Oct 2017)

newtothis said:


> The problem is that this, and consequently the headline, and indeed the title of this thread, is simply not true. What he actually said was that the rule that required women to give up paid employment when they got married was bonkers.


I agree. The Indo's "makey-uppy" reporting and the discussion here about something Paschal DIDN'T say is truly bonkers. More fake news and even faker discussion.


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## Dardania (18 Oct 2017)

Sounds like there's a consultation coming up on this in November - one to get the spoke in about it...


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## Conan (18 Oct 2017)

Raskalnikov,
That’s cannot be correct. If you have 40plus years up to age 67 then you will easily meet the minimum of 48 contributions over your PRSI history to qualify for the full State pension. Under the current system you need an average of 48 plus contributions per annum from when you first entered the PRSI system. If your average was between 40 and 48 then you get a 98% pension. 
So I don’t understand your calculations.


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## joe sod (19 Oct 2017)

Below is a table of contributory pension payable depending on average yearly prsi contributions, therefore if you have an average yearly conribution of 48 weeks or more you get full pension and so on. Its a copy and paste so I deleted additional stuff for clarity

"The table below sets out the rates of pension payable based on the yearly average of PRSI contributions.
State Pension (Contributory) rates in 2017
Yearly average PRSI contributions 

48 or over  €233.30      
40-47         €228.70      
30-39         €209.70     
20-29         €198.60     
15-19         €152.00    
10-14         €93.20           "

I think  there is a big thing made about nothing because the irish state pension is very generous. For example even if you had a big gap in contributions for example 15 years out of a 30 year working life which is a very long break by any standard you would fall into the 20-29 bracket as you would have at least an average of 25 and you still receive almost 200euro in pension. In that case the person that worked a full working life with no breaks for maybe 40 years still only receives the guts of 30 euros more hardly a great extra reward. Its also way more than the UK pension and probably unsustainable. I dont expect there be much left when I get to retirement age.
        I think it is like the guy that wins 1000 euros is happy until he realises the guy beside him won 1500 euros.


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## joe sod (19 Oct 2017)

joe sod said:


> For example even if you had a big gap in contributions for example 15 years out of a 30 year working life which is a very long break by any standard you would fall into the 20-29 bracket as you would have at least an average of 25 and you still receive almost 200euro in pension



a further big point to this is that for the state to pay out this reduced pension of 198 euros would require a pension pot of 181000 euros. In other words a private pension pot of 181000 at 66 could only pay out 198 euros per week. It is doubtful that a person with such a short working life could have paid this much in prsi contributions.


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## joe sod (21 Oct 2017)

whose idea was it anyway to allow a person with only 10 years of full prsi contributions to be entitled to a full pension, thats whats really "bonkers". Why was this measure brought in the first place, surely in fairness you should only get full pension if you have at least 20 years of full prsi contributions. If this becomes widely known we are going to have pension migration in order to take advantage of this, move to ireland in your 50s, work 10 years and you have full pension


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## Conan (21 Oct 2017)

Joe sod, you are correct. There was a proposal to change the rules in 2020 so that all contributors would get 1/30th of a State Pension for each year of PRSI contributions. So if one only had 10years then you would get 10/30ths. 
But for some reason that proposal seems to have been shelved. Don’t know why?


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## Protocol (21 Oct 2017)

Joe Sod,

it used to be a min of 260 weeks conts, i.e. 5 years.

Then in 2012 the minimum was increased to 520 weeks, i.e. 10 years.

Note that as well as having the 520 weeks, you must meet the average condition.

But yes, if you started paying SI aged 55, you could get a full CSP at age 66.


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## Protocol (21 Oct 2017)

Conan,
that proposal hasn't been shelved.
It was mentioned this week in the Oireachtas, 2021 was mentioned.


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## joe sod (21 Oct 2017)

Protocol said:


> Conan,
> that proposal hasn't been shelved.
> It was mentioned this week in the Oireachtas, 2021 was mentioned.



I also heard the minister saying that the changes would only apply to new entrants to prsi system, therefore it would be many years before it would be effective. I go back to my original point that to provide a pension of 198 euros per week requires a pension fund of 181000. The state will simply not be able to pay for even the old age pension with figures like that especially as the irish state is already highly indebted. Politicians might say pensions are sacrosanct and it seems have played politics with it for years to buy votes. It seems that now they can no longer play politics with it,it  would have been so easy to buy off these people yet again, but it appears that they have run out of rope. They will probably try and blame EU fiscal rules for not being able to fix this


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