Over 35,000 pensioners suffer losses from changes to Irish state pension
Written by Talya Misiri
09/02/17
Over 35,000 people had their pensions cut as a result of changes to the state pension in 2012 by the previous Irish government, Age Action has reported.
According to Age Action’s research, thousands of retired workers are losing more than €1,500 a year, with women suffering the most due to taking time out from the workforce to care for their families.
In 2012 the Irish government changed the eligibility criteria for the Contributory State Pension. Although those receiving or due to receive a full pension were unaffected, many who would have been expecting smaller pensions lost out on their income.
Age Action head of advocacy and communications Justin Moran said: “We need to put to bed the myth that the State Pension was protected by the last government.
“It was cut, drastically cut, for tens of thousands of older people who have lost substantial sums of money as a result.”
Moran continued: “Under the old system, if you had an average of 20 contributions you would be entitled to €228.70. But after 2012, this dropped to €198.60, a cut of more of more than thirty euro each week.”
Further, female pensioners were hit even harder by the amendments as a result of taking temporary leave from the workforce.
This was made considerably worse by the “averaging rule” implemented by the Department of Social Protection, which calculated the number of contributions made by workers. Under this system the number of PRSI contributions a worker has made is divided by the number of years between her first day of work and her retirement.
Moran explained: “This means that someone who worked for a few months in the sixties and then went back to work in 2000 gets a far smaller pension than someone of the same age who just started work in 2000.It’s an incredibly unfair system.”
Age Action cited figures from the Department of Social Protection, which show that of the 36,000 people affected by the pension changes, more than 62 per cent were women.
“Because the current generation of pensioners get no benefit from the Homemaker’s Scheme, it makes it difficult for them to qualify for a full State Pension” Moran said.
Senator Alice-Mary Higgins, who launched the report and has a long history of campaigning for pension reform added: “This report sheds much needed light on the disproportionate impact which recent changes to the contributory pension criteria have had on women in Ireland, adding a further injustice to the deep historic gender inequalities within our pension system.”
Age Action, is now calling on the Minister for Social Protection, Leo Varadkar TD to reverse the pension cuts and for the incomes of affected pensioners to be restored.
