Damien English (Meath West, Fine Gael) | Oireachtas source

I did not interrupt anybody.

In any discussion on pensions, we need to look at one simple, inescapable fact, namely, people are living longer. We have to accept that, plan for that and budget for that, and make sure the resources are in place for the lifetime of the pension. In 1971, the average life expectancy was 71 and, thankfully, by 2016, that had risen to 81. A person who reached 65 years of age in 1971 could expect to live to the age of 77 and, in 2016, that had increased to about 84. That is a positive development for our country and one we are trying to allow for in all our policies and plans, not just when it comes to the pension age but also housing for the ageing and every other policy document we bring forward as well. Of course, it is hugely welcome that people are living longer and healthier lives but it does present its own challenges, challenges we have to meet collectively and responsibly.

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 over €8.2 billion, so the numbers have really jumped in recent years. This expenditure increase is due in no small part to the ongoing increase in pensioner numbers. Some 743,000 persons over the age of 66 are expected to benefit from State pension payments next year. This is an increase of over 150,000 people in ten years. 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 not only to fund pensions but also to allocate resources to other priorities. I was involved in the document considering housing options for those who are ageing, an important document looking to the future and looking to give people a choice. Deputy Aengus Ó Snodaigh raised the issue of security for people in rented accommodation as they age and move onto the pension. It is important across all Departments that we recognise that policy changes and implementation are needed. It also has implications for intergenerational equity and fairness.

The sustainability of State pensions is not an issue unique to Ireland. This is a conversation that is happening all over Europe. In Northern Ireland, the pension age was increased from 65 to 66 last year and I believe it is planned to increase it again to 67 by 2028. It is easy to be populist but the bottom line is there are no easy options on this, and that is the case for governments across the world. This is an issue that has to be dealt with in the fairest possible way. That is why an independent commission to bring evidence to this and to allow evidence-based decision-making is appropriate, and it is one the Government will respond to. There is a duty on every Deputy in this House to ensure we do not jeopardise the future of the State pension system by taking short-term, populist approaches to this matter. The decisions we make today will not only impact those approaching retirement age but will have long-term and far-reaching implications, particularly for today’s younger generations of workers, who through their social insurance contributions and taxes are paying for today’s pensioners, but also for our children and their children when they reach retirement age over the coming decades.

While the Government will not oppose the motion, I want to be clear that we will be allowing the Pensions Commission to continue with its work independently and giving it the necessary time to finish its deliberations and report to the Government independently, based on evidence and assessment of where we are going with this. I expect that will happen in the near future and it would be inappropriate to pre-empt its conclusions and recommendations at this time. Once its report is finalised, the Government will consider the options and recommendations set out by the commission and, as promised in the programme for Government, will take action within six months.

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