Mr. Ciarán Lawler:

I will start where the Deputy finished. He spoke about some kind of a mix between earnings and prices, with some kind of oversight for times when something unusual is happening. That is the proposal endorsed by the Pensions Commission for State pensions. It is exactly the mechanism described by the Deputy. One cannot choose a benchmark that exists forever without some kind of review of effectiveness. That is what is proposed for pensions.

The Deputy mentioned that he does not see why there could not be a rationale for not indexing all social welfare payments. He could be absolutely right and it is something we must analyse in order to see how such a system would work. Would it be exactly the same as what is being proposed? We do not know. Would it be some kind of other indexation? We do not know. Where would the benchmark level be set? Would the benchmark be the same for all social welfare payments or would disability payments be different from jobseeker payments, for example?

When we speak about complexity, it relates to the range of payments and circumstances that people are in and what they need. There is also the fact that there are already different levels of payment for different circumstances across the system. That is what I mean by complexity, and it will require thought. Generally, across the system in Europe and beyond, the focus to a large extent in most countries is on pensions, and probably for the reasons I have just described relating to complexity when dealing with working age payments. We will start to look at it this year.

The Deputy asked where the 34% figure came from. This has a long history dating right back to the Commission on Social Welfare in 1986, for example. It set a kind of nominal rate, although I cannot remember if it was £50 or £60 at the time. The Pensions Board looked at it in 1998 in the context pensions and converted it to a percentage of earnings at the time. Pension rates have largely tracked that benchmark over those years and subsequently. As I mentioned to Deputy Pearse Doherty, if we consider poverty levels among older people on a general basis, they are lower than for other groups in society.