Joan Burton (Dublin West, Labour)

The presumption underpinning this question appears to be that, by enabling people within five years of retirement to reduce their employment and, presumably, have their income supplemented by the State, unemployed people will benefit from such an arrangement. Apart from the budgetary implications attaching to such an arrangement, there is no guarantee that job creation would result from such measures. In fact, recent research on intergenerational solidarity by the OECD demonstrates that the rate of employment of younger people has no relationship with the rate of employment of older people. The OECD states, "the idea that public policy can re-shuffle a fixed number of jobs between workers of different ages is simply not true in anything but the very short-term".

The critical factor is that if we are to deliver on our social contract to those in retirement, we need people to remain in work for as long as possible in order that we can deliver the supports necessary on retirement. In this context, the challenges facing the Irish pension system are significant. The population share of those aged 65 years and over is expected to more than double between now and 2050, from 11% to 26%. Thankfully, people are living longer and healthier lives with average life expectancy set to rise even further in future, up to 88 years for women and 83.9 for men. In contrast, the share of the working age population is projected to decline gradually from 68% to 58%.

Deputy Aengus Ó Snodaigh: There is quite an amount of information in the Minister's reply and also quite an amount of information which is not contained in the reply. The Minister stated that a total of €530 million will be expended this while the Estimate suggests it will be €395 million, without taking into account the €2

There are currently six people of working age for every pensioner and this ratio is expected to decrease to less than two workers to one pensioner by the middle of the century.

Spending on public pensions, that is social welfare pensions and public service occupational pensions, is projected to increase from approximately 5.5% of GDP in 2008, to almost 15% by 2050.

Additional information not given on the floor of the House.

For these reasons, State pension age will be increased gradually to 68 years. This will begin in 2014 with the standardisation of State pension age at 66. State pension age will be increased to 67 years in 2021 and to 68 in 2028.

The introduction of a scheme which encouraged reduced participation in the labour market for older workers would, therefore, be inconsistent with the interaction of current working age and pensions policy. In regard to occupational pension schemes, the trust deed and/or scheme rules will determine the retirement date for such schemes. Any change to these provisions would be a matter for the pension scheme trustees and/or employer.

Regarding assisting those on the live register to secure employment, the Department of Social Protection operates a range of employment support measures designed to encourage and support social welfare recipients of working age to reduce their dependency on welfare payments. These measures are consistent with efforts being made to encourage and facilitate people to continue to work up to and beyond pension age.

See this speech in context