Mr. Michael Taft:

I will take up a couple of the Deputy's points and then come back to his final question.

As for the two models, increasing the pension age and how much that would save set against future pension expenditure, both the Irish Fiscal Advisory Council and the Department of Finance project that pension expenditure will increase out to 2050 by anywhere between 5.5% and 6% of national income, or GNI*. We do not dispute that. The increase might be high or might be low but it will be in that neighbourhood. The fiscal council says, however, that increasing the pension age will result in savings of only 0.7%. That is about 10% to 15% of total savings. That is taking on board only the fiscal council's own numbers. It is therefore not us saying this; it is the fiscal council saying it. We are only drawing attention to that fact.

It would be helpful were the committee to ask the Department of Social Protection for the data it presented in two papers in 2020. First was the collated briefing submitted to the Department of the Taoiseach for the programme for Government talks. That was presented at that time to what were to be the three coalition parties. There is also the ministerial brief to the Minister, Deputy Humphreys, part B, which was also published in 2020. They present data that potentially undermine - we say "potentially" because we will not set this in hard and fast rules - the projections of the Department of Finance and the fiscal council because the Department of Social Protection factors in offsetting costs. Just because the pension age is raised does not mean that somebody on invalidity pension will not still be paid by the Social Insurance Fund, so there are very little savings to be made there. It is the same with the benefit payment. If the committee were to seek those data from the Department, it would help the debate and help the committee come to an understanding of the issue.

The Deputy asked where we find ourselves. We will need to do a number of things, and this is a significant challenge. We will have to find measures to promote economic growth. Unlike what the Commission on Pensions says, economic growth will generate savings and will in fact have a better impact on the public finances than increasing the pension age. We will have to look at PRSI contributions and the incentivisation of people to work while they draw down their pensions. In one sense Ireland is advantaged because we have one of the highest employment rates among people over the age of 65. People want to work beyond that age, so it is a matter of building on those incentives. If people continue to work, they still pay PRSI and, of course, tax on a large part of any pension payment, which would be subject to income tax. Such incentivisation would therefore be a fiscal good. Those are the three areas where we should start. Setting a context and getting the data right are key. That is what we urge the committee to explore in the context of what the Department of Finance and the fiscal council say on the one hand and, on the other, what the Department of Social Protection says.