Heather Humphreys (Cavan-Monaghan, Fine Gael) | Oireachtas source

I move amendment No. 17:

In page 26, between lines 25 and 26, to insert the following: “Amendment of section 113A of Principal Act

49.Section 113A of the Principal Act is amended, in subsection (3), by the substitution of “in accordance with the age referenced rate for age 66 years specified in section 111.” for “in accordance with the rate specified in section 111.”.

Amendment No. 17 provides for a consequential change to section 113A of the Act because of the introduction of pension deferral. This is to remove any ambiguity that an individual who automatically transfers from invalidity pension to the State contributory pension upon reaching the age of 66 will receive the age-referenced rate for age 66, as is the current practice. This recognises that the State pension age remains at 66 and the option to defer is a purely voluntary one.

Amendment No. 18 inserts the rates of State contributory pension for each of the relevant ages that a person can defer to. There will be five rates of payment for the State contributory pension, dependent upon the age a person is when he or she draws down his or her pension. These rates will be set out in the budget annually and based on actuarial factors, which will be reviewed every five years in line with the actuarial review of the Social Insurance Fund. Where the actuarial factors change based on any future review, a lead-in time to notify future pensioners will be provided.

Based on the January 2024 rate of the State contributory pension of €277.30, the increase rates to be set out in the Schedule will be as follows: €290.30 at age 67; €304.80 at age 68; €320.30 at age 69; and €337.20 at age 70. The increase for a qualified adult at each age will also be adjusted and this will be in line with the committee’s recommendation following pre-legislative scrutiny. Once a person claims his or her pension, he or she remains on that rate for life, subject to any budget changes, where the rate of increase will be enhanced by the actuarial factor relevant at the date of drawdown of his or her pension. For example, if the increase was 5%, any annual increase will also include an additional 5%. A person’s rate of payment will be the same regardless of whether he or she claims the pension from their birthday, that is, at the age of 67, or at any time prior to their next birthday, for example at the age of 67 and ten months.