18 Oct 2017

"Bonkers and unbelievable" pension system in Ireland

The Irish state pension has been calculated based on the number weeks of work. For women who left the workforce to raise children, or in some cases simply got married, this calculation is resulting in a considerably lower payment.

Ciara Kenny
Ciara Kenny The Irish Times, Ireland
Source: The Irish Times
"Bonkers and unbelievable" pension system in Ireland - NewsMavens
An elderly woman. jprohaszka/Pixabay (CC0)

Why this story matters:

The Irish Government is coming under increasing pressure to address anomalies in the state pension scheme which adversely impacts women.

Last week, Finance Minister Paschal Donohue took a live call on national radio from a pensioner, who claimed changes made to the contributory pension scheme in 2012 cost his wife 35 EUR a week, just because she took a summer job as a teenager.

Since 2012, the Irish state pension has been calculated based on the number of "stamps" -- Pay Related Social Insurance contributions -- paid for each week of work over a person’s lifetime. The total is added up and divided by the number of years between when they began work and retired.

But, for very many women who left the workforce to raise children, this calculation is resulting in a considerably lower payment.

It's made worse by the "marriage bar" in place in Ireland between 1932 and 1973 which forced women working in the public service -- with few exceptions -- to retire after they married. Public sector workers were not eligible for the state pension unless they joined after 1994. And the marriage bar was adopted by many private sector companies, including banks.

Age Action Ireland estimates that 36,000 older people had their pensions cut as a result of the 2012 changes, 62% of whom were women.

As Una Mullally writes, "The marriage bar was an act of gross discrimination against women, and that legacy of discrimination continues to be upheld into old age". Her opinion piece clearly explains the complexities of the system, and exposes the indefensible inequality, which the minister himself described as "bonkers and unbelievable".

Details from the story:

  • 36,000 -- the estimated number of people that had pensions cut in 2012
  • Under marriage bar laws, between 1932 and 1973 women in public service positions had to retire after they married
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