Joan Burton (Dublin West, Labour) | Oireachtas source

The State contributory pension is based on contributions paid and credited over the course of a working life and is not subject to means testing. I increased the maximum weekly personal rate in the recent budget to €233.30, with proportionate increases for qualified adults. There were more than 360,000 recipients of that pension at the end of last year, with expenditure in 2016 now estimated at just over €4.6 billion.

A number of changes were made to the State contributory pension in the past five years in the context of State pension reform and to provide for sustainable pensions in the future.

These included changes to the payment bands for those with a yearly average of between ten and 39 contributions per year. According to my Department's records, some 28,000 pensioners in this category may have been impacted by those changes, although this would be expected to change over time.

Reforms such as this and increases in the pension age have safeguarded the pension system and its core rates, despite very significant demographic pressures and the economic crisis. By achieving this, even in such difficult circumstances, the Government has shown its commitment to supporting older people, as evidenced by CSO figures for consistent poverty which are lowest among pensioners. Now, thanks to the economic policies we have pursued, we have been able to move into a real recovery. In the 2016 budget, this allowed us to increase the maximum personal rate of State pensions by €3 per week. This will benefit more than 676,000 pensioners and their dependants this year.

Looking ahead, the appropriate level of the State contributory pension is all about adequacy and affordability. I am confident that, as our economy continues to grow on a sustainable basis, it will allow us to continue to increase the level of support for people aged 66 and over and, in particular, to take account of inflation. In this regard, I am pleased that the Social Insurance Fund, which had a deficit of almost €2.8 billion in 2012, is expected to have a small surplus in 2016. This means contributory pensions are secure. When I became Minister, the Social Insurance Fund deficit meant contributory pensions, widow's and widower's pensions, maternity benefit and the future paternity benefit, which we will introduce in September, were at risk. I am happy to say we have secured the future of the State pension.

See this speech in context