Dara Calleary (Mayo, Fianna Fail)

As the Deputy may be aware, the previous Government established the Commission on Pensions to review the State pension system and make recommendations for its future. The commission strongly supported the retention of the qualifying criterion of 520 paid contributions. In part, this is because the actuarial value of the contributory State pension is currently estimated at approximately just under €400,000, so it is reasonable to require people claiming a contributory pension to have made at least 520 paid contributions over the term of their working life to qualify for a payment. Once a person reaches the qualifying criteria of 520 paid contributions, their rate of payment is determined by their total number of contributions, paid and credited, and the applicable calculation method.

In December 2023, legislation was enacted to introduce a series of landmark reforms to the State pension system in response to the commission's other recommendations. A key measure was the introduction of a flexible pension system. This new system is about providing people with choice. People will still be able to retire at 66 and draw down their pension as they always have. Additionally, they may now choose to defer claiming their contributory state pension up to age 70 and receive an actuarially based increase in their weekly payment rate.

People can decide for themselves what best suits their needs and circumstances. For example, a person who reaches age 66 who does not have sufficient contributions to qualify for a contributory State pension may be able to use this period to continue to work to establish entitlement or increase their level of payment. Where a person does not satisfy the conditions to qualify for the contributory pension or qualifies for less than the maximum rate, they may instead qualify for the means-tested non-contributory pension with a maximum payment equivalent to over 96% of the contributory rate.

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