Joe O'Brien (Dublin Fingal, Green Party) | Oireachtas source

I thank the Deputies for an engaging discussion on this important issue. As already said by the Minister, Deputy Humphreys, the fundamental objective of the Government's policy on State pensions is to ensure that pensions remain affordable, sustainable and retain their value into the future. We want to maintain a fair balance in the system. We must protect current as well as future pensioners, while at the same time protecting the most vulnerable pensioners who will remain at the forefront of any reforms in this area.

Discussions on State pension policy issues can be complex. It is important not to lose sight of the fact that our system provides a broad series of supports for older people, beyond the State contributory pension. These include other primary payments such as the non-contributory State pension and the widow's, widower's and surviving civil partner's pension. Additionally, we have targeted allowances such as the fuel allowance, over 80 allowance, living alone allowance and the living on a specified island allowance. Finally, we have service supports such as free travel.

As outlined by the Minister, Deputy Humphreys, the State pension age will not increase to 67 years next year. It will remain at 66 years, pending the report of the Commission on Pensions. The necessary legislative amendment is contained in the Social Welfare Bill 2020 which was published on 24 November 2020. This Bill will give legislative effect to a range of social welfare measures set out in budget 2021 and is scheduled to be debated in the House next week. I hope there will be cross-party support for the legislation. The Bill had to compete for Oireachtas time with the Brexit Bill. However, sufficient time has been scheduled in the Dáil and Seanad for debate on the Bill before the Christmas recess. It must be enacted by the end of the year so important payments can be made to social welfare recipients, such as the living alone allowance. The subject of this debate is also contained in the Bill.

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 that 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 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. To address a point made earlier that there was no civil society representation, that is not the case. The Irish Hospice Foundation, the CEO of SpunOut and ICTU are on the commission. 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 of the 11, are women. 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 to give other interested parties an opportunity to contribute to the process, the commission will seek submissions from stakeholders and representative groups.

In addition to repealing the increase in the pension age, the Minister has also committed to change the requirement for those who retire from work at the age of 65 years to sign on to a jobseeker payment in order to receive a State income support. She will shortly introduce regulations which will formally remove the current requirements for people of this age to sign on, participate in activation programmes or give an undertaking that they are genuinely seeking work. This will formalise an administrative practice which has been in place for some time.

It is clear that the Irish pension system faces demographic and sustainability challenges. While Ireland currently has a more favourable demographic position than many of our European peers, all EU member states, including Ireland, face many fiscal challenges relating to long-term ageing and its associated risks. Due to demographic pressures, the number of pensioners in Ireland will continue to rise. Population projections indicate that Ireland will undergo considerable demographic changes between 2020 and 2050. This has significant implications for the future costs of State pension provision.

Today, the Irish Fiscal Advisory Council published its latest fiscal advisory report, Sustaining the Economy through Covid-19. In the report it welcomes the establishment of the Commission on Pensions. It also, however, cautions that significant demographic-related pressures are projected over the medium term in respect of pensions expenditure.

Assuming that service levels remain constant and social payments such as pensions rise in line with wages, the council estimates an annual increase in State pension payments of €370 million, on average, over the years 2021 to 2025 based on increased numbers alone.

This Government is acutely conscious of the need to consider the sustainability of the State's finances. However, this is not the only consideration when thinking of the State pension age. The State pension is the bedrock of the pension system in Ireland. As the Minister, Deputy Humphreys, highlighted, it is extremely effective in ensuring that pensioners do not experience poverty. This Government is committed to ensuring that this remains the case. That is why it established the Commission on Pensions and is determined to give it the space and time it needs to evaluate and recommend an appropriate approach to sustain the system over the decades to come.

I thank all Members for their time and engagement this evening. I emphasise how important it is to ensure the State pension system provides adequate support to people in retirement and continues to do that over the long term. Accordingly, I strongly commend the Government's amendment to the House.

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