The Government has today agreed to address the state pension changes of 2012 that caused up to 42,000 people to lose out on full payments.
A change to pensions calculations was implemented in 2012 that caused pensioners, mostly women who had taken time out of paid work, to miss out on up to €35 per week in their pensions.
In a new system announced today, new Total Contributions Approach will calculate pensions based on all contributions made over a working career. From Autumn 2018 the Department of Welfare will invite over 40,000 pensioners, currently assessed under the 2012 rate band changes, to have their pensions recalculated.
The move was welcomed by Donegal Deputy Pat the Cope Gallagher. He said these changes being introduced by the Government will benefit hundreds of Donegal pensioners who are in receipt of a lesser pension since 2012.
“The changes brought in in 2012 severely disadvantaged thousands of pensions in Donegal and over 40,000 pensioners nationwide,” Pat the Cope said.
He added that the Government announced significant improvements to pension calculations for post-2012 pensioners with contribution gaps for homemaking and caring who were assessed under the pension rate band changes in 2012.
The changes introduced today are:
- A Total Contributions Approach (TCA) including a new ‘Home Caring Credit’ of up to 20 years will address anomalies from the yearly averaging system
- Over 40,000 pensioners assessed under the 2012 rate band changes will be contacted from Autumn 2018 and invited to have their pensions reviewed
- Pensioners who qualified after 2012 will receive the higher of their current rate or the new TCA rate
- Higher rates will commence from 30th March 2018
- First payments at these higher rates and any arrears payable from 30th March 2018 will be made in Q1 2019
- From now until the full implementation of the TCA, this option will be available to all new pension applicants
Pat the Cope stated: “These changes would not be introduced only for the massive pressure the Government were put under on this issue – it is essential now that these changes are implemented without delay and the transition to the new rate is seamless and that no one is left in any financial difficulty due to the changes.
“The Government must ensure that a full reimbursement is carried out for every recipient that was left disadvantaged due to the rule changes in 2012. I am delighted that this problem which was created by a previous Fine Gael Government is now at long last being corrected. “
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