Joan Burton (Dublin West, Labour) | Oireachtas source

I commissioned the OECD, Organisation for Economic Co-operation and Development, to prepare a report on introducing a supplementary pension scheme which would be developed along the lines of the successful schemes in Australia and New Zealand. On occasion, I have described it as a shamrock or Celtic saver. It would allow people to save money in a safe way to generate an additional pension, over and above the State contributory or non-contributory pension. The State contributory pension is among the best paid in Europe. Nonetheless, if one retires on that pension alone, it can be a very tight management exercise. As a society, notwithstanding the difficulties we have been through, we have prioritised continuing to spend on pensions to a very high degree.

The OECD reported last April and its key recommendation was to improve the adequacy of pensions by increasing coverage to the funded part of the pension system through a universal mandatory or quasi-mandatory employment-based pension scheme. In line with this recommendation, as well as the programme for Government and the recent 2014 to 2016 restatement of priorities which the Taoiseach and I drew up in July, the Government will agree during 2015 to a roadmap and timeline for the introduction of a new universal supplementary pension savings scheme. I am delighted to re-affirm this as it was not widely broadcast at the time. The decision has been taken in response to adequacy and sustainability challenges to the pensions system. This has been an increasing concern, as Deputy O’Dea said, in recent years.

I gave some statistics earlier. In the period since 1995, supplementary income coverage has remained at only approximately 50% and this figure needs to improve significantly. It is an issue for atypical workers who are in and out of the workforce. It is also an issue for women in particular, and for quite a lot of self-employed people, particularly in very small operations. Significant improvement of this figure is an important national goal.

The State pension is and will continue to be a key social welfare payment. It is the fundamental basis for the Irish pension system. It is a very valuable benefit. While, thankfully, people live longer and healthier lives, the cost to the State and the individual of supporting this longer life is increasing incrementally. I gave the committee some figures earlier. Approximately 17,000 additional pensioners come into receipt of the State pension every year. The over 65 year old population is projected to increase from 11% of the total population in 2010 to 15% as soon as 2020. Sometimes when I hear people speaking at conferences about this they speak about 2040 and 2050, but a year-on-year increase in the number of retired people is with us at present, and those who retire live longer. At present there are 5.3 people of working age for every pensioner and this ratio is expected to decrease to approximately 2:1 by 2060. This is in line with almost every other European country.

Given the changing demographics and the incrementally upward pressure of pension provision and State finances, there is a need to provide a long-term savings habit and mechanism by individuals to supplement income from the State pension for those who will otherwise not be in a position to enjoy standards of living in retirement similar to those in pre-retirement. Development of the roadmap for a universal pension involves detailed consideration of policy and operational parameters. It includes co-operation across a range of Government Departments and engagement of all sectoral interests. I am happy to say much work is ongoing in the Department. This will involve major IT input. There are major considerations for the pensions industry in Ireland and I have spoken at a number of conferences on the very detailed technical issue. I am happy that now in particular, with the recovery taking hold and with the agreement in July, we will be in a position to progress this significantly. In countries which have done this successfully it took a number of years and was built up a very gradual period of time. This is very much what I envisage happening in the Irish system. When incomes of people in employment have been so tight it has been difficult to envisage them making additional savings for their retirement and I am looking forward to the development of this in the economy.

On the related question of funeral expenses and how we support people, I am glad to have an opportunity to speak about the number of supports in place. We make a direct cash payment of €6,000 to a widow, widower or surviving partner with a child or children on the death of his or her spouse or partner. This is a very important payment and goes to the person and family directly bereaved. At the time of the changes to the bereavement grant I stated I wanted to emphasise support for the direct survivors of the person. In some cases estates are left to far more distant relatives. I would like the limited funding we have to be concentrated on the direct family and children of the person who died. In the case of the death of someone on a retirement pension we continue to pay the retirement pension for a period of six weeks after the individual's death. These are the two significant payments we make.

With regard to the exceptional needs payment, we have provided €31.3 million in 2014 and more than 68,500 special needs payment were made to the end of August 2014 for a variety of needs. With the development of the new Intreo offices the Department has consolidated community welfare services to people in need of special needs payments in all of our new offices. We also have a telephone system available and, if it is required, we will get officials to call directly to the person's house.

I cannot give the committee the detail on this. Last year €4.398 million was spent on supporting the cost of burials. I do not have the 2014 data yet but I will try to get the information for the Deputy and we will have it at the end of the year. We must collate it in detail from community welfare officers throughout the country. They are significant supports for people with requirements for financial support for funeral costs. My colleague in the Labour Party parliamentary party, Deputy Eamonn Maloney, has drawn attention to this. The burial costs charged, particularly in the Dublin area, have risen by extraordinary lengths. Deputy Maloney tabled a Private Members' Bill to restrict some of the costs related to the opening of graves. People such as Deputy Keating and I know that some of the cemetery companies charges, even to place a small urn with the ashes of a beloved one in an existing family grave, are extraordinarily high.