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

The roadmap for social inclusion contains a commitment to develop a benchmarking approach for use in adjusting the value of State pension payments. The approach proposed by the Department, known as the smoothed earnings approach, was subsequently endorsed by the Pensions Commission. I am pleased to say that the Government subsequently agreed the Department of Social Protection would, in submitting budget options, set out the rate of pension payment using the smoothed earnings benchmark approach, and can confirm that this calculation was prepared and submitted to Government as an input into budget preparations.

Taking account of this benchmark in assessing the options open to it the Government was mindful, as it was last year, that the cost-of-living pressures were most acute over the winter period. For that reason, and rather than take a simplistic approach to applying an indexed rate of increase to weekly rates of payment, the Government decided to front-load supports through the provision of special payments including extra fuel allowance, working family payment, child benefit, carer's allowance, disability allowance, qualified child and living alone payments. These payments are in addition not only to the €12 increase in the weekly payment rate, but to the Christmas bonus payments being made this week and extra double week payments being made in January. This combination of special payments plus a weekly rate increase, not only exceeds the value of a benchmarked increase, but ensures a significant proportion of this value is delivered when people need it most - over the winter period.

The double payment to be made in January, for example, will have a value for a single pensioner of €277.30, equivalent to more than €5 per week - as does the double payment to be made this week. That is more than €10 per week in value from these two payments alone. Pensioners living alone, and in receipt of fuel allowance, will have received bonus payments of €500 - equivalent to approximately a further €10 per week. The measures taken by the Government therefore meet, and in fact exceed, any increase calculated under the smoothed earnings benchmark. In addition, ESRI post-budget analysis shows that the approach taken by the Government is progressive in nature and that households, including pensioner households, are better off compared to a purely index-linked approach. Its analysis also showed that the approach taken benefited low-income households the most and reduced their risk of poverty.

See this speech in context