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Cork East Fine Gael TD and Minister of State at the Department of Justice, David Stanton, has welcomed confirmation that the Government has begun the first review of recipients of the State Pension (Contributory).

The review of the State Pension (Contributory), announced last year by the Government, applies to current pensioners whose rate of entitlement was assessed according to pension rate band changes which were introduced in 2012. The review will provide for an alternative Total Contributions Approach (TCA) re-calculation for contributory pensioners born on or after the 1st September 1946. New Home Caring periods will also take account of time spent out of the workplace for parenting or caring duties.

The new TCA marks a move away from the old ‘averaging rule’ system whereby a person’s Pay Related Social Insurance (PRSI) contributions were added up and then averaged over the number of years from the date of their first PRSI contribution to the end of the tax year before reaching pension age. Under the new calculation method, pension entitlement will be based on the total number of contributions a person has made over their working career only, the maximum length of which, for calculation purposes, will be 40 years.

Speaking after the first reviews had been conducted; Minister Stanton said “1,138 pensions reviews have been completed to date with 86% (978) of those reviewed set to receive an increase in their payment under the new approach. The remainder will continue on their existing rate. It is important to stress that no existing pensioner will be worse off financially.

“The Minister for Employment Affairs and Social Protection, Regina Doherty TD, has confirmed that her department is examining the pension payments of approximately 90,000 pensioners nationwide who reached pension age on or after the 1st September 2012. Reviews will continue until all identified pensioners receive an outcome in writing.

“Given the number of reviews involved, the process is expected to continue for a number of months but the Department is committed to doing this as speedily as possible and has recruited additional staff to do so.

“Where due, increased payments will be made without delay and will include arrears back to 30 March 2018 or the pensioner’s 66th birthday if it occurred after this date. Where pension rates do not increase as a result of this review, the existing rate of entitlement will continue to be paid”, concluded Minister Stanton.