Joan Burton (Dublin West, Labour) | Oireachtas source

Table 3 on page 6 gives the summary. Deputies will see that for the State contributory pension there is extra spending of €160 million provided for this year. Members of the committee will be aware that every year of the three years I have been involved in budgets I have had to provide between €160 million and up to €190 million in extra spending on the extra numbers of people in our population who become entitled to the contributory pension or the lesser numbers who become entitled to a non-contributory pension. The extra cost to the State over the next five years for pensions for people over 66 years of age and also widow's and widower's pensions is estimated at approximately €1 billion. It is in the order of €1 billion every five years. That is a cost the Department must meet, and in times of very straitened resources we must do that largely out of existing envelopes of expenditure.

With regard to the State transition pension, the Deputy will know, because he was a member of the Government at the time, that a Green Paper and a pensions paper were produced in 2007 and 2009 which indicated, based on the actuarial studies, that there would be a greater cost for pensions in Ireland for the Irish State because of the growing number of older people in the population. More of them are insured, which is fantastic. They constitute a growing number in the overall numbers of people becoming entitled to the State pension. They are also living longer. The last actuarial review of the social insurance fund, which I published in 2012, showed that the shortfall was in the order of €1.5 billion in terms of expenditure. Since then, with some changes in PRSI, we have narrowed that gap, but the additional cost over the next five years will be €1 billion overall.

In respect of people reaching 65 years of age, the Deputy will recall that in the social welfare Bill we passed recently in the context of the budget, I changed the arrangements for people over 62 years of age. Most Deputies strongly approved of it. People over 62 years of age on jobseeker's allowance now just have to go to their local Intreo or social welfare office and sign on once a year. If they wish, they can get their money by electronic fund transfer. They do not have to take part in activation arrangements; they can if they wish, but they are not obliged to do so. With regard to people who turn 65 years old, if they qualify for a jobseeker's benefit, that continues undisturbed for the year. The Deputy is correct that a significant number of people might well be on other types of social welfare payment. They will continue on those for the year and then transit at 66 years of age.

In 2012, 11,130 people were awarded the State transition pension. Of these, just 1,390 came from employment and 50.63% or 5,635 came from another social welfare payment. Previously, the same trends were broadly identified in 2006 and 2007. Members should also recall that there are many Irish people who are retired, particularly in the United Kingdom, who might have worked for parts of their working life in the Republic. They would also apply at relevant ages for whatever entitlements they might have built up during their time working in Ireland.