Homemaker's Scheme versus HomeCaring Periods scheme - main differences?

[Protocol]

I know that I can read the details on Citizens Information website, but can anybody give me a quick summary of the main differences between these schemes?

Nothing jumps out at me so far.

But they must be different?

Does the difference apply only to non-SAHP?

 

[ClubMan]

Maybe ChatGPT can assist?
(The usual caveats about AI accuracy apply - I've seen ChatGPT get very some basic stuff wrong, and not just the number of 'r's in "Strawberry"! ).

Question:​

In Ireland, in relation to PRSI and social insurance/protection, what are the main differences between the Homemaker's Scheme and the Home Caring Periods scheme?

ChatGPT said:​

In Ireland, both the Homemaker’s Scheme and the HomeCaring Periods Scheme help individuals who take time out of work to care for children or adults to maintain their entitlement to social welfare benefits, particularly the State Pension (Contributory). However, there are key differences between the two:

Homemaker’s Scheme:​

• Introduced: 1994.
• Eligibility: For people who provide full-time care for children under 12 years of age or for an incapacitated person over 12.
• Coverage period: Applies from 1994 onwards. Any period before this year does not count under the scheme.
• Effect on PRSI: The scheme doesn’t award credits or PRSI contributions, but it disregards up to 20 years spent caring when calculating your yearly average PRSI contributions for the State Pension (Contributory).
• Application: You must apply for the Homemaker’s Scheme to avail of the benefit, usually after finishing your caring responsibilities.

HomeCaring Periods Scheme:​

• Introduced: 2018, as part of the Total Contributions Approach (TCA) to pensions.
• Eligibility: Available to people who provide care for children under 12 or care for an incapacitated person of any age.
• Coverage period: It allows for recognition of periods from both before and after 1994 (which Homemaker’s Scheme does not).
• Effect on PRSI: Under the HomeCaring Periods Scheme, you can be credited for up to 20 years of home caring periods (1,040 weeks) when calculating pension entitlement, which helps in achieving a full State Pension (Contributory) under the TCA.
• Application: No separate application is required; these periods are assessed automatically when you apply for your pension.

Key Differences:​

1. Timeframe: The Homemaker’s Scheme only applies from 1994 onwards, while the HomeCaring Periods Scheme can cover periods both before and after 1994.
2. Recognition: The Homemaker’s Scheme disregards time spent caring but does not credit PRSI, whereas the HomeCaring Periods Scheme credits the care periods towards pension entitlements.
3. Approach: The HomeCaring Periods Scheme is part of the TCA approach, which looks at total contributions made over a lifetime, while the Homemaker's Scheme impacts the older yearly average PRSI calculation method.

The HomeCaring Periods Scheme offers broader coverage and is particularly beneficial for those with longer or earlier caring periods.

 

[Marsupial]

In summary:

Homemakers Scheme: increases one's yearly average when calculating one's pension entitlement by means of the Yearly Average Method.

[two methods: either disregards full years (which reduces the divisor) OR gives credits for incomplete years (which increase the dividend) OR both, if applicable]

HomeCarers Scheme: allows credits that increase the total number of reckonable contributions when using the Total Contributions Approach.

Both can be applied for in respect of the same period(s) of absence from the workforce.

 

[Protocol]

That is very helpful, thank you.

I knew that the earlier Homemakers scheme involved disregards of years, and so reduces the denominator in the average calculation.

I did not know that the newer scheme actually adds credits.

 

[Marsupial]

That is very helpful, thank you.

I knew that the earlier Homemakers scheme involved disregards of years, and so reduces the denominator in the average calculation.

I did not know that the newer scheme actually adds credits.

Apologies, I had incorrrectly typed "TCA" twice above; but the Homemakers Scheme only applies to the YAM.

I have now corrrected my earlier response.

 

[Protocol]

In the case of a SAHP aged, say 30 / 40 / 50 in 2024, clearly it is the TCA that will apply when they reach State Pension age, okay.

This gives me food for thought, thanks.

 

[Marsupial]

In the case of a SAHP aged, say 30 / 40 / 50 in 2024, clearly it is the TCA that will apply when they reach State Pension age, okay.

This gives me food for thought, thanks.

It should.

But everything may change if the Kneecappers and Diesel Launderers Alliance take power after the coming General Election!