Liz McManus (Wicklow, Labour)
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Question 9: To ask the Minister for Social and Family Affairs if the Government has made a commitment to increase the State pension to €300 per week; and if he will make a statement on the matter. [7907/07]

Phil Hogan (Carlow-Kilkenny, Fine Gael)
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Question 40: To ask the Minister for Social and Family Affairs his plans to index link the State pension to both 40% and 50% of the gross average industrial earnings respectively; the cost of same respectively in 2007; and if he will make a statement on the matter. [7967/07]

Ruairi Quinn (Dublin South East, Labour)
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Question 164: To ask the Minister for Social and Family Affairs the cost to the Exchequer of increasing the basic State pension to €300 per week. [8164/07]

Séamus Brennan (Dublin South, Fianna Fail)
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I propose to take Questions Nos. 9, 40 and 164 together.

Since taking office the Government has made the needs of older people a priority with the inclusion of several commitments in the Programme for Government aimed specifically at this group. I am pleased to say that we have delivered on the most recent of these commitments, which was to increase the non-contributory State pension to €200 per week by 2007.

The contributory State pension has passed this mark and now stands at €209.30 per week. Pension increases have been well ahead of inflation, thus ensuring that they are significantly improved in real terms. Since 1996, and including the recent budget increases, pensions have increased by almost 119% or about 57% in real terms. The Government has not committed itself at this stage to any particular rate of pension for the future. Rather, I am determined that we will build on the success achieved in this area and, as part of the social partnership agreement Towards 2016, it was agreed to work with the social partners over a ten-year period to enhance pension provision and income supports generally. This will include further enhancements of social welfare pensions over the period and a commitment to build on the now achieved 2007 target of €200 per week.

According to the most recent data from the Central Statistics Office, gross average industrial earnings were €601 per week in September 2006. On that basis, a pension based on 40% of gross average industrial earnings would be approximately €240 per week, and a 50% pension would be approximately €300 per week.

The estimated additional costs in a full year of bringing all maximum rates for those over 66 up to these levels, while maintaining the current relationship of increases for qualified adults to the personal rates, are approximately €720 million and €2 billion respectively. These estimates are based on the current number of older people in receipt of a pension. They include the cost of increasing payments to qualified adults to maintain their current proportional relationship to the personal weekly rates of payment, but do not include any additional people that would qualify for a means-tested pension.

The Government is preparing a Green Paper on pensions and I expect that this will be finalised by the end of this month. It will include a discussion of all aspects of our pension system, including the contribution of social welfare pensions to ensuring an adequate income for older people in retirement, which is at the same time sustainable in the long-term. Following the publication of the Green Paper, the Government will respond by establishing a framework for future pension policy.

Willie Penrose (Westmeath, Labour)
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I thank the Minister for his reply. What was the nature of the discussions undertaken as part of the Towards 2016 programme? Were any particular targets set in that regard, or did the social partners address that issue? Was the Minister caught on the hop by the Tánaiste, Deputy McDowell's, solo-run intervention, or was it a naked pitch for the grey vote? It startled everybody across the country and not just the Minister present. Did the Tánaiste give any indication, perhaps via a sneak preview, to his Government partners? In that context, did I understand the Minister to say that 50% of average industrial earnings is measured at €300?

Dan Boyle (Cork South Central, Green Party)
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It will only be 36% actually.

Willie Penrose (Westmeath, Labour)
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The Minister mentioned a figure of €2 billion. Will he expand upon that cost and indicate exactly what it relates to? I know it is election time but with the additional moneys last year, the Minister spent €1.3 billion or €1.4 billion. He thought that was a very good sum, so will this be €2 billion for one area of social welfare?

Séamus Brennan (Dublin South, Fianna Fail)
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It was not just the Tánaiste's party conference that surprised me with its announcements — the other two parties currently represented in the House also surprised me with their announcements, but I have been doing the sums. Gross average industrial earnings were €601 in September 2006. On that basis, a pension based on 40% of gross average industrial earnings would be approximately €240 per week. A 50% pension would be approximately €300 per week. The estimated additional costs, in a full year, of bringing all maximum rates for those over 66 years of age to these levels, while maintaining the current relationship of increases for qualified adults to personal rates, are approximately €720 million and €2 billion respectively. This includes the qualified adult allowances, QAAs.

David Stanton (Cork East, Fine Gael)
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The Minister is referring to additional costs. Can he give us the full cost to the Exchequer of those rates? What is his opinion on the report from the Pensions Board, which has recommended that the State pension be increased to 40% of gross average industrial earnings? Is the level of the State pension currently about 32% of gross average industrial earnings? Will the Minister comment on poverty rates among pensioners with regard to income and other social transfers? What plans does he have to address poverty among older people?

Séamus Brennan (Dublin South, Fianna Fail)
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The figures of €720 million and €2 billion are additional costs which must be added to the current pension expenditure to give the total cost.

I was surprised when I heard Green Party announcements on the radio at the weekend because they suggested, almost chapter by the chapter, everything the Pensions Board had proposed in its report.

Dan Boyle (Cork South Central, Green Party)
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It must have been our submission.

Séamus Brennan (Dublin South, Fianna Fail)
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I asked the Pensions Board to examine these issues and it did so professionally by considering the facts and figures and presenting me with a report which I took to Government. The Government ordered a second report to deal with the mandatory aspect of it and we have already started to implement aspects of the first report. We are committed to flushing out the remaining issues through the Green Paper process and making urgent progress on pensions, particularly the occupational side. Many of the proposals I heard on pensions were familiar to me from the Pensions Board report that I commissioned last year.

The State pension is currently about 35% of gross average industrial earnings.

Dan Boyle (Cork South Central, Green Party)
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It is 33% of gross average industrial earnings.

Séamus Brennan (Dublin South, Fianna Fail)
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I have a figure of 33.5% somewhere, which is also in the Pensions Board report.

Dan Boyle (Cork South Central, Green Party)
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The Minister should be glad that someone reads them.

Séamus Brennan (Dublin South, Fianna Fail)
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The level of poverty among older people is below the general level of poverty because of transfers, fee schemes and the fact that most older people do not have mortgages to pay. From a technical point of view, and I stress the word "technical", older people are below the average level of poverty in the country. There is another measure of pensioner poverty that I acknowledge but it is not shown in other measurements because lone parents, for example, tend to experience higher levels of poverty than old people.

Dan Boyle (Cork South Central, Green Party)
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Nobody is suggesting those pension increases can be achieved in one year. We should strive for a rate of 40% of gross average industrial earnings after one term of Government, 50% after two terms and the European average after three terms. Would it not be the case that the average increase in pensions in those terms would be in the region of €250 million to €350 million per year?

Séamus Brennan (Dublin South, Fianna Fail)
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The Deputy is talking about three terms of Government and that seriously worries me.