Willie Penrose (Longford-Westmeath, Labour) | Oireachtas source

I am glad to have the opportunity to contribute on the important issue of the pension age. We are on target to have one of the highest ages in Europe at which people can access the State pension, despite Ireland having the youngest population in Europe and the third highest fertility rate. The latter two facts mean that in 50 years' time, Ireland will still have the lowest proportion of older people in the EU, with nearly 20% less than the EU average. As such, the percentage of national income spent on public pensions will only rise by 3 percentage points from its 2016 base of 8% over the next half century.

In many respects, we should have one of the lowest pension ages in the EU but the opposite is true. It is obvious that the Government intends to push ahead with increasing the pension age to 67 by 2021 and 68 by 2028. In contrast, the average EU pension age will rise to 66 years of age by the middle of the century. It is unnecessary for Ireland to do more than that. The decision to increase the pension age was made at a time of unprecedented economic hardship and has no validity now that the economy has recovered. Why should those who have spent their lives working pay the cost of financial recklessness?

The change is being pushed through without consultation with Deputies or the relevant economic, political and civic stakeholders, including the trade union movement. The supposed savings are unclear as the Government has failed to publish a detailed analysis of the impact of the proposed increase on the public finances. The report proposed in the amendment could be vital in that respect.

Approximately 30,000 people will turn 66 in 2021, but a substantial number of them will have been required under their work contract to retire at 65 and, as such, will have spent a year on jobseeker's benefit. The extension to the normal jobseeker's benefit rules means that it continues to a person's 66th birthday. Will it continue to a person's 67th year if the Government extends the retirement age to 67 in 2021? How many will be affected by this change? These are people who have worked and paid taxes all their lives. For a single person, there is only €45 difference per week between jobseeker's benefit and the pension. Increasing the pension age will result in a meagre saving for the Government, especially if one takes into account the extra administrative burden created by people having to first apply for jobseeker's benefit and then for the State pension. A far greater degree of loss will be experienced by the affected individuals and their families. The increase would entail a loss of up to €2,400 a year for a single person or up to €6,000 for a couple. That is a massive cut, particularly in light of the cost of living and inflation. All that pain will be caused to individuals in order for the Government to save a mere 0.2% of national income in pension payments by 2021. The Social Insurance Fund which pays for pensions will have a surplus of nearly €4 billion by the end of this year. There is a problem there.

I am self-employed, as some other Deputies may be. I am delighted with some of the changes that have been made in favour of the self-employed. The extension of jobseeker's benefit to the self-employed is wonderful. It will cost €31 million. People have pointed out that I am arguing against my own best interests in this regard. The self-employed only pay 4% in contributions, compared with the rate of 14.95% paid by employees.

Those fortunate enough to have a private pension will get it at an earlier age than their peers who must wait for the State pension. That will reinforce yet another two-tier system within our society. I note Deputy O'Dea raised related concerns last week in the media. There is a significant amount of work to be done.

There is a gender aspect to this issue due to the historical gender pay gap and the difference in the duration of time spent in work. Women at retirement age are less likely than men to have a private pension and their pension package is worth on average 22% less than their male counterparts.

What is the point of increasing the pension age? It makes little financial sense and involves no sense of fairness towards those with a lifetime of work behind them. That is why at our recent party conference the leader of the Labour Party, Deputy Howlin, outlined our intention to campaign to stop the rise of the pension age to 67 for the lifetime of the next Government. There is sense in that proposal. In light of the country's changed circumstances, we should revisit decisions such as this.

There is a joint motion. I was not at the Oireachtas Joint Committee on Employment Affairs and Social Protection in the middle of 2017. I believe Deputy O'Dea might have been there. The motion proposed that the Minister should review the disparity between the retirement age and pension age, and that the proposed increases in pensionable age should be suspended. That was a call by all parties, including the Minister's. It is now time to follow through on this and give those approaching their pension age what they have earned.

We must continue to seek the reversal of these measures, the increase in welfare payment indexed to inflation and an increase in the minimum wage and subsequently a living wage. That is what we had set out. There is no withdrawing or resiling on the part of the Labour Party in this area. We have been fighting for this for a long time. We need to get those at the earliest opportunity. The Deputy is right about the need to make the amendment in the National Minimum Wage Act. I explained in law, after I sat down as a barrister and reviewed it, that if we did not make the change that has been made here today, the whole thing would fall flat in 2020, which would be a catastrophe for people.

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