Tom Fleming (Kerry South, Independent)
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Question 17: To ask the Minister for Social Protection the way in which she will reform the systems of payments from her Department, through the provision of part pensions to persons nearing retirement age; the contacts that she has had with other Government Departments in attempting to draw up such schemes in an effort to reduce the numbers claiming social welfare; and if she will make a statement on the matter. [21029/11]

Joan Burton (Dublin West, Labour)
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The presumption underpinning this question appears to be that, by enabling people within five years of retirement to reduce their employment and, presumably, have their income supplemented by the State, unemployed people will benefit from such an arrangement. Apart from the budgetary implications attaching to such an arrangement, there is no guarantee that job creation would result from such measures. In fact, recent research on intergenerational solidarity by the OECD demonstrates that the rate of employment of younger people has no relationship with the rate of employment of older people. The OECD states, "the idea that public policy can re-shuffle a fixed number of jobs between workers of different ages is simply not true in anything but the very short-term".

The critical factor is that if we are to deliver on our social contract to those in retirement, we need people to remain in work for as long as possible in order that we can deliver the supports necessary on retirement. In this context, the challenges facing the Irish pension system are significant. The population share of those aged 65 years and over is expected to more than double between now and 2050, from 11% to 26%. Thankfully, people are living longer and healthier lives with average life expectancy set to rise even further in future, up to 88 years for women and 83.9 for men. In contrast, the share of the working age population is projected to decline gradually from 68% to 58%.

Deputy Aengus Ó Snodaigh: There is quite an amount of information in the Minister's reply and also quite an amount of information which is not contained in the reply. The Minister stated that a total of €530 million will be expended this while the Estimate suggests it will be €395 million, without taking into account the €2

There are currently six people of working age for every pensioner and this ratio is expected to decrease to less than two workers to one pensioner by the middle of the century.

Spending on public pensions, that is social welfare pensions and public service occupational pensions, is projected to increase from approximately 5.5% of GDP in 2008, to almost 15% by 2050.

Additional information not given on the floor of the House.

For these reasons, State pension age will be increased gradually to 68 years. This will begin in 2014 with the standardisation of State pension age at 66. State pension age will be increased to 67 years in 2021 and to 68 in 2028.

The introduction of a scheme which encouraged reduced participation in the labour market for older workers would, therefore, be inconsistent with the interaction of current working age and pensions policy. In regard to occupational pension schemes, the trust deed and/or scheme rules will determine the retirement date for such schemes. Any change to these provisions would be a matter for the pension scheme trustees and/or employer.

Regarding assisting those on the live register to secure employment, the Department of Social Protection operates a range of employment support measures designed to encourage and support social welfare recipients of working age to reduce their dependency on welfare payments. These measures are consistent with efforts being made to encourage and facilitate people to continue to work up to and beyond pension age.

Tom Fleming (Kerry South, Independent)
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I originally submitted this question to the Minister for Jobs, Enterprise and Innovation, Deputy Bruton, and it has been transferred to the Minister for Social Protection, Deputy Burton. The question has also been reworded. As there are approximately 450,000 unemployed people we need to promptly introduce some jobs initiatives. I proposed to the Minister for Jobs, Enterprise and Innovation that we should sponsor a programme across the private and public sectors whereby employees who are within five years of their normal retirement date could, with the approval of their employer, job-share with a person on a fixed-term contract. The scheme should be attractive to a person agreeing to a job-share arrangement for a specific number of years within the five-year period. Therefore the person opting to work should have each job-sharing year counted as a full year for pension purposes, whereas the person on the fixed-term contract, while not having pension contributions made for him or her by the employer would have the benefit of getting off the unemployment register and entering the workforce where he or she can develop and acquire new skills.

Michael Kitt (Galway East, Fianna Fail)
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The Deputy should frame a question.

Tom Fleming (Kerry South, Independent)
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The Minister said some people would not avail of the scheme because of the age difference; it would not be relevant. In principle the scheme should be workable. Graduates coming from college cannot get to develop what they have and are losing what they acquired in education. It is very demoralising for these people and I believe many would avail of such a scheme which would allow them to go into semi-retirement and take up other recreations and so on.

Joan Burton (Dublin West, Labour)
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I thank the Deputy for the question. He indicated he had submitted a proposal to the Minister for Jobs, Enterprise and Innovation, Deputy Bruton. I would also be very happy to receive the submission. There is an issue of balancing. Many older people wish and need to work longer to build up their pension entitlements for when they are retired, particularly women who might have been out of the labour force because they were on family duties during part of their working years. Some older people may wish to reduce the number of hours they work, but there are also older people who definitely want to stay working. The Polish Presidency of the EU has been holding a number of discussions on the issue. There is no absolute link between older people retiring and those jobs being made available and created for younger people. In some cases the jobs may simply be suppressed entirely.

I understand the Deputy's motivation and perhaps the watchword is to try to produce a flexible system for what people may wish to do as they approach retirement. Up to approximately 2007, there was a pre-retirement payment that was abolished by the previous Government in 2007. That payment recognised that people who left work at a certain age were unlikely to resume working again or perhaps for health or other reasons did not. I understand and share the Deputy's concern.

Regarding jobs for young people, we have just created the national internship scheme, which is designed to do some of what the Deputy is suggesting. We are beginning to roll it out and seeing the first people getting six and nine-month internships with employers in a variety of occupations throughout the country. I would be delighted to receive the Deputy's submission and I share his concerns. However, I am not sure it is possible to match older retiring workers exactly with younger people.