Peter Fitzpatrick (Louth, Independent) | Oireachtas source

I welcome the opportunity to contribute to the debate on the Bill and I will support its progress today. The Spotlight on Income in Older Age: The State of Ageing in Ireland 2023 report found that 30% of people aged 66 and older rely on State payments from the Department of Social Protection for more than 90% of the money on which they live. This shows the heavy dependence on public schemes such as the State pension together with supports, such as the medical card and free travel pass, for survival. In this context the programme for Government committed to introducing a system to enable people to defer receipt of their State contributory pension on an annual basis, up to the age of 70.

With that in mind, I welcome this Bill wherein the Government recognises that there is a trend to people working longer. While recommendations from the Oireachtas Joint Committee on Social Protection would put the cut-off age for the State pension at 75 on account of the fact that life expectancy in Ireland has increased, the Government decided not to increase the State pension age. This may be debated in the future taking life expectancy rates into consideration but, for now, this is a good step forward.

Where they have capacity and want to do so, facilitating those without a full social insurance record to increase their retirement provision by choosing to continue making PRSI payments beyond pensionable age is a positive step. As well as increasing their retirement provision, in return for deferral, such people will receive an increased State pension payment calculated on an actuarial basis as well as extended access to a range of working-age schemes, which currently cease at age 66.

To clarify, the benchmark reference State pension age will remain at 66, as will entitlement to ancillary age-related benefits, such as free travel. This will allow those deferring accessing the pension and who had turned 66 after 1 January next year to access an enhanced rate of remuneration dependent on the age at which they deferred, with a different rate paid for ages 67, 68, 69, and 70. People drawing the pension at or after the age of 67 will, therefore, receive an increased rate of payment for each full year they defer the drawdown.

Overall, introducing pension deferral arrangements will be beneficial to some. However, calculating the benefit will be down to the individual and his or her health and ability to work. As it is an actuarial rate, if a person lives longer, he or she will obviously gain significantly because he or she will be on this significantly enhanced rate. It must be noted that this will most likely cause considerable confusion when people have various options for the calculations. Consideration will need to be given to how this is communicated to the applicants themselves. The Department will need to clearly lay out the benefits and potential downfalls and the resulting figures. It is important that the impression is not given that by deferring it, there is an enhancement for everybody. There could be a very significant loss for some people. It must also be stressed within communications that there is nothing to stop a person drawing his or her pension and continuing to work. There is no connection between entitlement to the pension and whether or not a person continues to work. The decision is down to the individual person and, therefore, I welcome the incorporation of the option in the Bill.

It will, of course, enable people who do not have a full contribution history to improve their contribution record, which is often the case with carers and mothers. At present, home caring periods and homemaking disregards only apply and deliver value if a person has a minimum of ten years' paid PRSI contributions from employment or self-employment. While this is believed to be fair and appropriate in the case of child-rearing, it may not be sufficient to deal with people who devote a large amount of time looking after and caring for incapacitated relations. The burden of caring and the consequential loss of pension entitlements falls disproportionately on women, who comprise 80% of carer's allowance recipients and 93% of domiciliary care allowance recipients. Women might only work for six or seven years prior to having a child who subsequently might be sick from an early age and, therefore, would not have ten years of work accumulated. People who leave the workforce early to care for an incapacitated child or other relations can find it difficult to accrue ten years of paid contributions. In addition, periods spent caring can reduce the overall number of reckonable contributions that a long-term carer can accrue. Therefore, I very much welcome the attention to carers within this Bill. It is really important to address this issue.

The role of long-term carers and the value they deliver to society needs to be recognised within the pension scheme. Within the Bill, the Government has acknowledged that role and recognised the enormous value of the work carried out by them and is fully committed to supporting them in that role. Accordingly, it is only right that the long-term carers of incapacitated people should be given access to the State contributory pension system by having retrospective contributions paid to them by the Exchequer for gaps in their contribution history arising from that caring. If enacted, this would mean that some carers would receive a contributory payment in their own right for the first time.

Communication campaigns for this, as well as the carer's support grant, are paramount. Tying the pension eligibility and carer's support grant information together is probably a way to get more of these applications over the line. Ireland has an ageing population and the number of people aged 65 increased in both urban and rural areas between 2011 and 2016, accounting for 15% of the population in rural areas. Additionally, almost 300,000 people currently provide unpaid care to others, 86,000 of whom provide care for 43 hours or more each week. Carers do a fantastic job, and, in fairness, they save the State a fortune. The main provisions that have been included in the Bill are, therefore, welcome and they all move in the right direction towards inclusion, equality and fairness. No delays should be imposed. We need to ensure that this legislation is fit for purpose and successfully enacted as quickly as possible, preferably by 1 January 2023, as the application window has opened for long-term carers to apply for attributed contributions.

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