Women losing out on pensions - Bonkers (Minister)

Sam Russell · 13-10-2017 10:19am #1

The Minister for Finance has described as 'Bonkers' the rules that deny many women their full pension because of a revision of the rules in 2012 by the Minister Joan Burton.

Irish Times

There’s a lot of talk about women being denied full pensions in the budget. Is this something new?
Not at all. In fact, it’s a grievance that goes back decades and relates originally to the marriage bar that forced thousands of women out of their jobs in the Irish public sector and other private companies, like the banks, when they got married.
It also affects a lot of women who took time out of work to raise a family or care for relatives.

Basically, a persons pension entitlement is calculated on their contributions averaged over their working life. So far - OK.

However, hard cases arise for example of a woman who worked for 8 weeks in the summer when she was 16 and again when she was 17. SShe paid stamps for both periods. Later, she then went to work for the state as a civil servant and had to resign when she married. (10 years contributions). She spent a number of years bringing up her family. She returned to the work force till retirement at 66.

Because she started work at 16, her contributions are averaged over 50 years, which is harsh. She was forced to resign due to the marriage bar - which was harsh and would now be illegal.

So her pension is calculated on 50 years requiring 48 contributions per year.

The cost of putting this right for all those affected would be €220 million a year. Bonkers says Minister Donahue, but I cannot find the money.

As a start, the rules could be adjusted so that the maximum number of years be set at 35 years, and the most advantage 35 years are taken. This would be at least fair. It is a contributory pension so it must be based on contributions.

Unfortunately, once a pension is granted, it is unlikely to be revisited, so it is essential some mitigation is applied as soon as possible.

Good loser · 14-10-2017 12:16am

What the Minister said was 'bonkers' was the marriage bar - not the pension computations.

Cookie_Monster · 14-10-2017 3:12am

Sam Russell wrote: »

As a start, the rules could be adjusted so that the maximum number of years be set at 35 years, and the most advantage 35 years are taken. This would be at least fair. It is a contributory pension so it must be based on contributions.

well that would have to apply to everyone then, no?

She was forced to resign due to the marriage bar - which was harsh and would now be illegal.

the state forced her to get married?:eek:

Bass Reeves · 14-10-2017 9:22am

Cookie_Monster wrote: »

well that would have to apply to everyone then, no?

the state forced her to get married?:eek:

The marriage bar was a law that forced public servants to resign when they got married. However in general the issue relating to contributory pensions is complex. The issue to the state is total cost of pensions. It would be harsh to means test pensions and discourage private sector workers from investing in pensions or providing for there pensions.

People indicated from early that averaging rules were harsh where workers were abroad for a few years or worked during summer holidays going to college and school. As well it was interesting to see that the minister chose to spend the flexibility he had in the budget giving an extra five euro to existing pensioners and unemployed rather than tackling the anomaly.

The other issue the government have is that any radical change may well allow not just those effected by the marriage ban but other to access a higher pension. Joan Brutons attempt at reorganizing the pensions rules was an attempt to stop those on class D PRSI from accessing a high pension rate but it created other pensions traps for other workers that pay PRSI.

Sam Russell · 14-10-2017 9:51am

Cookie_Monster wrote: »

well that would have to apply to everyone then, no?

the state forced her to get married?:eek:

No, but if they got married they were forced to resign. It only applied to women, but not to nurses or teachers, which are two professions dominated by women.

The matter is about the contributory pension which is based on the number of weeks worked where a stamp was paid.

The problem highlighted is the method of averaging contributions over a working life. The particular case is extreme but shows the difficulty. If you take two women who's work pattern is considered for contributions, with the exception that one started work in a holiday job for a few weeks at the age of sixteen, while the other did not start work until after raising her children at the age of 46. Let us say both worked for 20 years worth of contributions, and then worked till retirement at 66. The first has her contributions averaged over 50 years while the second is averaged over 20 years. The first person gets a much smaller pension than the second even though their total contributions might be the same. That is the anomaly.

Leo V has said the calculations should be based on the number of contributions not on when they were made.

recedite · 14-10-2017 11:26am

Whats bonkers here is that they have admitted it's a gross injustice, and then blandly said they won't be doing anything about it because it would cost money.
Yeah, all pensions cost money. Especially those gilt edged, defined benefit, double pensions that the ex-govt. ministers get. I don't see them being cancelled for the lack of money though.

server down · 14-10-2017 11:29am

Good loser wrote: »

What the Minister said was 'bonkers' was the marriage bar - not the pension computations.

No the pension computations are nonsense. The earlier you work the more you are likely to not achieve a full pension. Don’t work at all and it’s a full pension.

rgossip30 · 23-01-2018 2:21pm

I have gaps in my PRSI record since 1975 . The employer did not pay PRSI unknown to me and I worked part time .I may not get a full pension as a result .I think many are in this situation not only women in the civil service .When one considers that someone can come work 10-15 years and get a full pension is bonkers .

Eric Cartman · 24-01-2018 8:17pm

I think putting it over the years total is a bit bonkers, however if you take a couple , both civil servants, the man working from 18-65 without stopping and the woman taking out the say 15 years with marriage ban and then retiring at 65, she should still lose out 15 years payments due to not working. You can adjust round the calculations , but you can't just go handing out free pension cash for time not worked.

blanch152 · 25-01-2018 1:57pm

Eric Cartman wrote: »

I think putting it over the years total is a bit bonkers, however if you take a couple , both civil servants, the man working from 18-65 without stopping and the woman taking out the say 15 years with marriage ban and then retiring at 65, she should still lose out 15 years payments due to not working. You can adjust round the calculations , but you can't just go handing out free pension cash for time not worked.

If they are retired, they are probably Class D PRSI and don't get the contributory pension anyway.

Manach · 25-01-2018 2:09pm

Given the state's raiding of the pension funds by the levy, perhaps this loss also can be written off as a sacrifice to the state.

Women losing out on pensions - Bonkers (Minister)

Comments