Dáil debates

Wednesday, 15 June 2011

3:00 pm

Photo of Clare DalyClare Daly (Dublin North, Socialist Party)
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Question 32: To ask the Minister for Social Protection if the recent referendum in Slovenia when persons were consulted on raising the pension age will have any bearing on her proposals to raise the pension age here; and if she will make a statement on the matter. [15367/11]

Photo of Pearse DohertyPearse Doherty (Donegal South West, Sinn Fein)
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Question 39: To ask the Minister for Social Protection if her attention has been drawn to the views expressed by the Irish Senior Citizens Parliament that any raising of the pension age must be done on a voluntary basis only; and if she will abandon her plans to mandatorily raise the pension age. [15335/11]

Photo of Martin FerrisMartin Ferris (Kerry North-West Limerick, Sinn Fein)
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Question 52: To ask the Minister for Social Protection her views that the lead-in time for the raising of the pension age is far too short; and if she will abandon her plans to raise the pension age. [15333/11]

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Question 58: To ask the Minister for Social Protection if the recent referendum in Slovenia when the people were consulted on raising the pension age will have any bearing on her proposals to raise the pension age here; and if she will make a statement on the matter. [15324/11]

Photo of Sandra McLellanSandra McLellan (Cork East, Sinn Fein)
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Question 65: To ask the Minister for Social Protection if her attention has been drawn to the fact that in the country's largest union deemed the proposals contained in the national pensions framework an assault on State old age pension provision; and if she will abandon her plans to raise the pension age. [15336/11]

Photo of Aengus Ó SnodaighAengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Question 68: To ask the Minister for Social Protection her views that her plans to raise the pension age amount to a 16% cut to pension entitlements; and if she will abandon her plans to raise the pension age [15338/11]

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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I propose to take Questions Nos. 32, 39, 52, 58, 65 and 68 together.

The challenges facing the Irish pension system are significant. There is an important and significant policy background to these changes which is that with increases in life expectancy, more people are living to pension age and living longer in retirement. This has obvious implications for the future costs of State pension provision.

I want to emphasise the fundamental principle that people need to participate in the workforce for longer and they need to contribute more towards their pensions if they are to achieve the income they expect or would like to have in retirement. The population share of those aged 65 and over is expected to more than double between now and 2050, from 11% to 26%. People are also living longer. Spending on public pensions, that is, social welfare pensions and public service occupational pensions, is projected to increase from approximately 5% of GDP in 2008 to almost 15% by 2050.

As announced in the national pensions framework, the State pension age will be increased gradually to 68 years. This will begin in 2014, with the standardisation of the State pension age at 66. The State pension age will be increased to 67 years in 2021 and to 68 in 2028. It is worth noting that until the early 1970s, the qualifying age for a pension was 70 years of age. The legislative changes for this are included in the Social Welfare and Pensions Bill 2011 currently before the Dáil. It also meets commitments Ireland entered into in the EU-IMF programme of financial support for Ireland.

By gradually increasing the qualifying age for State pension, people will be further encouraged to remain in employment beyond 65 years of age. The numbers currently at work drop dramatically at 65 years of age. The quarterly national household survey of 2010 showed that 77.2% % of people aged 45 years to 54 years were at work. This drops to 64.3% for 55 to 64 year olds and to just 8.7% for people aged 65 years or over.

In terms of consultation, the Green Paper on Pensions was published in October 2007 and commenced an extensive consultation process to gather the views of people and organisations on the Irish current pensions system with submissions received from individuals and from organisations. The consultation process continued until the end of May 2008 and a report on the consultation process was published in September 2008. This report and the submissions received can be viewed on the national pensions framework website.

Work then began on developing a framework for pensions which was published in March 2010. Further consultation has taken place on implementation of aspects of the national pensions framework.

I am confident that the consultation process has been an open and inclusive one and that all those who wished to make their views on pensions known have had the opportunity to do so.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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Is it not the case that the Minister is trying to put a positive spin on what is an outrageous diktat from the IMF-EU to force working people in this country to work longer, harder and for less? Given that working class people, poor people, live shorter lives, this will disproportionately hit them and essentially work some people to death when they should have a few years to enjoy a dignified retirement.

Is not the least we could expect in such a serious matter, namely, raising the pension age, that the people would have a democratic say? Is it not extraordinary that in Slovenia on 5 June, a referendum was held on this matter and the people voted 72% against raising the pension age when their government planned to do the same as this one? Could we not have the same level of democracy on this key issue affecting ordinary people as the people of Slovenia had?

Italy has referendums on key and substantial issues of policy. One would not associate a country headed by Silvio Berlusconi with great levels of democracy but it has held referendums on serious and substantial issues and the government there has been defeated. Why can we not have a democratic say on this outrageous measure to force the people to work longer and harder for less?

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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I do not know about the Deputy's experiences but I frequently meet older people who would like the right to work longer. Happily, as a society, we are all living longer. In terms of the contribution and commitment of this State, everybody in work paying taxation and PRSI is contributing extensively to pensions. Some 280,000 people are on contributory State pensions which cost €3.45 billion in 2010 while 97,000 people are on the non-contributory pension which cost almost €1 billion. The contributions of the citizens of this State through taxes and PRSI they pay to pensions is considerable.

As I said, the age profile of this State is changing. Happily, people are living longer and many want to work longer. Many people stay in education longer than people used to and their working lives are somewhat shorter than they used to be.

What we need is a level of flexibility and flexi-security to deal with the changing demographics and the changing nature of work and work patterns in this country while ensuring that when people retire as they get older, they have a State pension at a level which allows them to live in comfort and dignity.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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The Minister did not really answer the questions. Is it not the case that if we had a referendum on raising the State pension age, some would be in favour of it, as in Slovenia where 20% or so were in favour of it, and some would be against it, as in Slovenia where 72% were against it? Is it also not the case that if we had a referendum and people had a democratic say, we would get a similar result?

Given the physical nature of their jobs, manual workers are exhausted by the age of 65 and they would not wish to be forced to work longer. Can we have consultation on what is a very serious measure? Has the Minister costed this? If public sector workers, who will be paid at the top of the incremental scale, work longer, younger workers, who will come in at the lower end of the incremental scale, will not be coming in. Will it not cost the State money to force public sector workers to work longer?

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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The discussions currently with public sector workers are under the aegis of the Croke Park Agreement and unless I am mistaken, workers and their representatives were voluntary participants in the Croke Park Agreement discussions and the structure and nature of that agreement. The State is an important and a critical employer in this country and it should be involved in negotiations with workers and their representatives.

The Deputy must recognise that those working on building sites for many years will probably not wish to do so when they are in their late 50s or early 60s. However, many members of my family were builders and builders labourers. My two uncles worked well into their 70s and nobody could stop them, even though we wanted to do so. I do not believe we should be overly prescriptive on how working class people live their lives.

Photo of Richard Boyd BarrettRichard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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It should be voluntary.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Some people wish to work longer while some wish to retire earlier. There may be people who have no particular desire to work at all, although they would be few in number. We must provide a good system of pensions in retirement which, in particular, allow for the different types of lives people live. Women, for instance, often drop in and drop out of the labour force because they may take time out when rearing small children. Women and men also may take time out when caring for older relatives. The pension structures we are evolving must reflect the diversity and complexity of modern life and work patterns. That makes sense rather than representing a threat to people.

Photo of Joan CollinsJoan Collins (Dublin South Central, People Before Profit Alliance)
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Is the Minister saying she is carrying on the cuts Fianna Fáil introduced, because she has laid out the process since 2009? Is extending the age for the State pension reflective of quotes from people like Colm McCarthy of an bord snip nua who, in the Irish Examiner in July 2009, stated that people used to snuff it at 70 but they have now decided to snuff it at 80, 85 or 90 and that something has to give? Is this what the Minister is giving?

Photo of John HalliganJohn Halligan (Waterford, Independent)
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Is the Minister serious that people such as small farmers, who might work 70 to 90 hours per week, and shift workers, who might have been doing shift work for 20 to 40 years, want to work an extra year when they reach the age of 65? The Minister cannot seriously believe that. It comes down to having some type of dignity and quality of life at the end of one's working life.

Photo of Michael KittMichael Kitt (Galway East, Fianna Fail)
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The Deputy should ask a question.

Photo of John HalliganJohn Halligan (Waterford, Independent)
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Does the Minister really believe that? She will obviously say she does but is she seriously stating that when people at the lower and hardest end of the working scale, such as builders, labourers, small farmers and people on shift work, reach 65 years of age they do not wish to spend more time with their families? The Minister is saying they want to work an extra year at their eight hour shift that starts at midnight or to go out on their farms to start work at five in the evening. Nobody in Ireland would believe that.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Deputy Collins referred to people who are 90 years of age. The proposal is that in 2014 the standard pension age would become 66 years. The only person aged 90 I saw recently who is actively working was pretty impressive and is probably a strong recommendation for people remaining very active, but active in a way that is appropriate to their physical condition, age and inclinations. The critical issue is offering people opportunities and options.

This country has a good and solid old age pensions system which has evolved through collective social agreement between all the political parties and people of no political party over a long period. However, this country faces really serious demographic changes for which we must make provision. We are also in a desperate economic hole. The Government did not develop this economic hole, but we will not go into that at present. We must try to make the best possible use of resources. There are some people who wish to have the opportunity to work for longer. Deputies must also take account of women who might have a reduced number of working years due to their commitments to caring for young and older people. The pensions system must be designed for a wide range of people.