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

I move amendment No. 1:

To delete all words after “Dáil Éireann” and substitute the following: “notes that:

— the Programme for Government ‘Our Shared Future’ has committed to maintaining the State Pension as the bedrock of the Irish pension system;

— this includes a commitment to establish a Commission on Pensions and pending the report of that Commission to maintain the State Pension age at 66;

— the Government has already established this Commission on Pensions;

— the Commission on Pensions has already conducted its first meeting, its second is scheduled for tomorrow the 2nd December, its third is scheduled for later this month and it will meet approximately every fortnight in the new year until it concludes its work;

— the Government has approved the Social Welfare Bill 2020, which in addition to giving legislative effect to a range of social welfare measures announced in Budget 2021 on 13th October, 2020, includes specific provisions to repeal increases in the State Pension age ensuring that it will remain at 66 pending the report of the Commission on Pensions and consideration of that report by Government;

— the Social Welfare Bill 2020 was published on 24th November, 2020;

— as set out in that Bill the Government is also repealing the planned increase from 67 to 68 which is scheduled to happen on 1st January, 2028, thus ensuring that the Commission on Pensions can consider matters in relation to the State Pension age unfettered by any prospective changes;

— the Government has noted the Minister for Social Protection’s proposal to sign regulations to formally remove the requirement for 65-year olds to be actively seeking work and to ‘sign on’, formalising an administrative arrangement which has already been in place for some time;

— persons aged 65 or over who retire and qualify for a Jobseeker’s Benefit payment may retain that payment in full until they reach the State Pension age of 66 assuming they don’t return to work;

— the payment rate of €203 is in fact higher than the rate available for the full State Pension in other jurisdictions such as Northern Ireland where the state pension age has been increased from 65 to 66;

— the Terms of Reference of the Commission on Pensions includes consideration of a range of pensions matters including sustainability, eligibility and cross generational equity issues, and consideration of options for the Government to address issues including qualifying age, contribution rates, total contributions and eligibility requirements;

— in addition, the Commission on Pensions will consider the issue of retirement ages specified in employment contracts that are below the State Pension age, including where contracts stipulate a retirement age of 65;

— section 34(4) of the Employment Equality Act 1998 (as amended) already provides that an employer has to prove a contractual retirement age that is objectively justified by a legitimate aim and the means of achieving that aim are appropriate and necessary, with recourse for employees to the Workplace Relations Commission in the event of breaches;

— to assist employers and employees in this regard and in respect of retirement ages, the Workplace Relations Commission has produced a Code of Practice on Longer Working, and the Irish Human Rights and Equality Commission has published guidance material for employers on the use of fixed-term contracts beyond normal retirement age; and

— the rate for the State Pension (Contributory) in Ireland compares very favourably with neighbouring jurisdictions where pension rates are significantly lower.”

I welcome the opportunity to discuss the State pension age. I am proposing this amendment, because the simple fact is that Sinn Féin has put down a motion calling for legislation to stop the increase in the State pension age to 67 when the Government has already approved and published legislation to do just that. It was done last week. As part of the Social Welfare Bill, which will come before the Houses next week, the pension age will be kept at 66 and the planned increases in the age, to 67 in January 2021 and to 68 in January 2028, will both be repealed. This will allow the Commission on Pensions, recently established by Government, to do its work and produce its recommendations independently.

From an adequacy point of view, the Irish State pension is excellent at protecting pensioners from poverty. Pension rates in Ireland compare favourably with other jurisdictions. For example, the contributory State pension here is more than €248. In Northern Ireland, it is considerably less, at £175 or about €195. In any discussion on pensions, we must look at one simple, inescapable fact - people are living longer. In 1971, the average life expectancy was 71, but by 2016 that had risen to 81. A person who reached 65 years of age in 1971 could expect to live to age 77, but in 2016 that has, thankfully, increased to about 84. It is hugely welcome of course that people are living longer, healthier lives, but it presents its own challenges. In 1997, spending on pensions was €1.7 billion. By 2010, this had increased to €5.8 billion, and by 2019, the cost had increased to more than €8.2 billion.

This expenditure increase is due in no small part to the ongoing increase in the number of pensioners. Approximately 743,000 people over 66 are expected to benefit from State pension payments next year. This is an increase of more than 150,000 people in ten years. As a result, spending on pensions accounts for about 26% of all income tax and PRSI receipts. About 40% of the total social welfare budget is spent on pensions, up from 28% in 2010. Whether we like it or not, this has obvious implications for the ability of the State to not only fund pensions but also to allocate resources to other priorities. It also has implications for inter-generational equity and fairness.

The Social Insurance Fund, SIF, operates on a pay-as-you-go basis, with today's pensions being funded not by past contributions but by the current contributions of today's workers. What this means, and what is often overlooked, is that the group in society which will be most impacted by the decisions which must be taken regarding the future structure of the State pension are not, in fact, current pensioners, or those approaching pension age, but the younger workers and students of today. For the sake of future pensioners and workers, we must strive to ensure the long-term sustainability of the pension system so that today's workers will be able to avail of an adequate pension when their time comes to retire. I was also a PAYE worker all my life before I entered politics and Dáil Éireann. As a working woman and a member of a trade union, I also understand the difficulties workers face. No party has a monopoly on the understanding of workers and the issues they face today.

The Commission on Pensions has been asked to examine a range of issues, including the State pension age, eligibility conditions and payment and contribution rates. The commission will also consider the issue of retirement ages, specified in employment contracts, which are below the State pension age and how the pension system can provide adequate cover for carers. It has been tasked with producing its report by June of 2021. The membership of the commission has been carefully chosen so that it can address these questions with an open mind and with the expertise and experience necessary to meet this deadline. Its members are drawn from trade union and employer bodies, civil society, academia and those with technical and policy expertise.

The Government was also keen to ensure that the commission had strong female representation in its membership, and I am pleased that the majority of members - six out of 11 - are women, including a female chairperson. I am confident, therefore, that the commission is well equipped to grasp the potential impacts of any pension reform options on affected groups, such as women, workers, and older people. In addition, and in order to give other interested parties an opportunity to contribute to the process, I have asked the commission to seek submissions from stakeholders and representative groups.

In addition to repealing the increase in the pension age, I will also shortly be introducing regulations which will formally remove the current requirements for people aged 65 and over to sign-on, participate in activation programmes or give an undertaking that they are genuinely seeking work. The idea, therefore, that any 65 year old will have to stand in a dole queue is absolute nonsense. I am formalising an administrative practice which has already been in place for some time. While the payment rate of €203 for 65 year olds is less than the full contributory pension rate, it is worth bearing in mind that a 65 year old receiving €203 per week here is still better off than any pensioner in Northern Ireland.

I assure the Deputies that the fundamental objective of Government pension policy is to ensure that pensions remain affordable, sustainable and retain their value into the future.

We want to maintain a fair balance between those who are contributing to the system and those who are drawing from it. The need to protect current as well as future pensioners, while at the same time protecting the most vulnerable pensioners, will remain at the forefront of any reforms in this area.

Rather than allow the Commission on Pensions the time and space in which to do its work, Sinn Féin has sought to politicise the pensions issue. The pension age was never 65. There is no mandatory retirement age. Retirement is a matter for individual contracts between employers and employees. This motion is another example of Sinn Féin saying one thing in this House while doing the exact opposite in Northern Ireland. I have asked the Deputies who spoke so passionately earlier if they had relayed those same comments and concerns to their colleagues in Northern Ireland. I do not believe their colleagues are listening in Northern Ireland where Sinn Féin is in government and where the state pension age has recently been increased from 65 to 66. Maybe before coming in here, the Sinn Féin Deputies should speak to Michelle O'Neill or Conor Murphy. While they are at it they can ask them if they have any plans to increase the pension in the North. The fact is that the maximum rate of pension available in Northern Ireland equates to about €195. As I have said, that compares with a contributory pension in the State of more than €268.

I am pleased to say that the Social Welfare Bill, which we will debate next week, also provides for an increase in the living alone allowance by €5 per week at a cost of more than €57 million per year, and in the fuel allowance by €3.50 per week at a cost of €36.8 million annually. These are all measures that will improve the welfare of pensioners and, in particular, those who live alone.

I am a firm believer that actions speak louder than words. This Government is supporting our older people and our actions clearly demonstrate that. I ask Sinn Féin to reflect on the adequacy of the supports they are providing for older people in Northern Ireland. I hear it regularly from people in Fermanagh, Armagh and Tyrone when they say to me that pensioners are far better off south of the Border and I have to say to them that I agree with them.

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