Tuesday, 22 June 2021
State Pension Age: Motion [Private Members]
That Dáil Éireann: notes that:— workers in the State make a considerable tax contribution throughout their working life and should have the right to access the full pension rate of payment when they retire at age 65;calls on the Government to:
— some workers want to retire at age 65, while others want to remain at work, where they are able and willing to do so;
— numerous employment contracts stipulate an end of employment date in line with when an employee turns 65 years of age;
— since the abolition of the State Pension Transition payment, thousands of 65-year-olds have had to sign on for a Jobseeker’s payment;
— there are now thousands of 65-year-olds who are on the Jobseeker’s social welfare rate of €203 per week instead of the State Pension rate;
— there is a difference of €45.30 between the Jobseeker payments and the State Pension, leading to an annual loss of €2,355.60; and
— the pension age had been scheduled in legislation to increase to 67 years of age in 2021, and 68 years of age in 2028; and— commit to restoring the State Pension Transition payment for those retiring at 65 years of age;
— abolish mandatory retirement, with exceptions for security-related employment, to give workers the choice to work or retire so long as they are fit to do so;
— ensure that workers who choose to work on, do so on their own terms, and in their conditions of employment they are not compelled to sign fixed- or short-term contracts of employment;
— make provision for those who remain at work beyond 65 years of age to have their Pay Related Social Insurance contributions counted towards their State Pension; and
— commit not to further increase the State Pension age.
It is not that long since the last election and the message from voters then was very, very clear. Workers want the right to their pension rate of pay, after a lifetime of work, when they reach the age of 65. They also want the choice to work on on their same terms and conditions of employment. In short, workers want choice and I agree with them. That is what this motion is about. It is about giving workers a choice and making a public declaration we listened to them in the last election and have not forgotten the message they gave us.
After a lifetime of work, I and Sinn Féin believe a worker should be able to retire on the full pension rate of pay. That was abolished by the Fine Gael-Labour Party Government in 2013. We want that position reversed and replaced with the choice to access the pension rate of pay at 65 or to work on on the same terms and conditions of employment. That is an important part of this motion. We want to see Deputies backing the position that workers should not only have the right to work on when their contract states they must retire at a certain age but that they should not be forced to take lesser or different terms and conditions of employment. They should have the right to work on on the same terms and conditions.
I would welcome the views of the Minister of State on this matter, which is important. There are many reasons for workers wanting to work on, not least of which is the sky-rocketing cost of housing. They should not have their terms and conditions diminished. In fact, the State should protect their terms and conditions, when they exercise the right to work on. There are many workers in arduous employment. They spend all day on their feet, carrying heavy loads, cleaning and working outdoors in all weathers. When they get to 65, their shift is done. They are ready to retire and want the dignity of the pension rate of pay. They have paid tax all their working lives and want to be able to access the pension rate at 65.
I do not know that many of us in this House will ever understand what a lifetime of backbreaking work does to a person's body, but we can certainly show empathy and try to understand that many workers are simply not able to continue past the age of 65.
Being able to access the pension rate means they can realistically consider stopping work. If one is waiting tables, laying blocks, stacking shelves, cleaning or doing any other physically demanding work, that extra year makes a huge difference.
I understand the Minister of State will read the script, try to deflect from the issues and maybe try to score a few political points but I caution against that. This Dáil motion gives the Minister of State the opportunity to speak directly to those workers and let them know where he stands on this important issue. I ask him to address his remarks directly to those workers to let them know if he is prepared to hear their concerns and fears about being denied the pension rate of pay at the age of 65 after a lifetime of work and to outline the Government’s position on the right to work past the retirement age stipulated in a worker’s contract on the same terms and conditions. I really want to hear the Government’s position on this. I further ask the Minister of State to recognise the contribution these workers have made during their whole working lives.
We often stand in this Chamber and say politics is about making choices. We have a choice this evening. Sinn Féin has chosen to use our time to amplify the very real concerns of these workers about the mean-spirited move to raise the pension age. We want to use our time to let the Government know that workers want and deserve the choice at the age of 65. When one hits 65 in this State, the chances are that one has been working and paying tax and PRSI for decades and that one started work believing one would be able to retire at the age of 65.
We ask the Government to join us this evening to support older workers and give them dignity. “Dignity” is an important word here. When we talk to people on the doors, which we have the opportunity to do now with the approaching by-election, they say there is dignity in being able to access the pension rate of pay at the age of 65. We ask the Government to join us in supporting that.
There is a fundamental difference between the view of the Minister of State and the Government and our view when it comes to retirement. The Minister of State and the Government think it is appropriate for people at retirement to be paid a jobseeker’s rate of €203. We do not. The Minister of State and the Government think it is fine for workers who have paid into the social insurance fund for decades - some for 30, 40 or more years - not to be able to access their pension at retirement. We do not. To be clear, we seek in this motion to restore the State pension transition for people retiring at 65. It was a mistake to abolish that in 2014. I am still waiting for someone in government to tell me what will happen if the proposed pension age increases go ahead. Will we have a situation where the new benefit payment for 65-year-olds becomes the new benefit payment for 65- and 66-year-olds? Will there be a gap of two years where people are paid a jobseeker’s rate, losing out on over €4,700 in that time? We must be the only country in the world to place people who are retiring on a jobseeker’s rate payment.
I know the Minister of State will tell us how adequate our State pension rate is and he will probably compare it to the rate in the North. That is not in question this evening. The rate in question is €203 per week. That rate is far from adequate; in fact, it is set below the poverty line. When one talks about adequacy, one does not talk about the cost of living. A EUROSTAT report was issued today showing that prices in Ireland for goods and services are the joint second highest in Europe and were 36% higher than the average across the EU last year. We are one of the most expensive countries in Europe for food. Utility bills are 78% more expensive than the EU average. We really should leave the argument in relation to how adequate our rates are right there.
The Minister of State will also tell us there is no mandatory retirement age in Ireland, which ignores the reality that every year people are forced to retire at the age of 65 because they are contractually obliged to do so. This is an issue and was acknowledged as such in the last Dáil when a Sinn Féin Bill to abolish mandatory retirement was passed unanimously. We need to progress that.
We should let people remain at work if they wish and are willing and able to do so. We should also let them continue to contribute their PRSI into the social insurance fund. That is a win-win situation. This is committed to in the programme for Government but it can only be of benefit if we allow for longer working lives.
I expect the Minister of State will use the North not just to compare what is beyond comparison in relation to the rates but also to highlight the fact the North has a state pension age of 66, without putting on the record the reality of the North, which is important to do. Westminster determines the pension age and decided to increase it to 66. If we departed from that, we would have to cover the cost out of the tiny block grant we get to run the North. The Minister of State will also know we have extremely limited revenue-raising powers in the North. It is important to put that on the record because it is common practice in here for the Government to use the North in debates like this, rarely in any positive way. It shows an arrogance and ignorance on behalf of Fianna Fáil and Fine Gael to throw an argument like that out. It shows a lack of information as to how the North works.
We make no apology for reiterating the calls clearly made by the people in the polls last February in the general election and saying we need to put an end to the mad situation of, first, telling people they can no longer do their job at 65 and, second, telling them they have to retire having done their work and contributed for decades and will receive a jobseeker’s payment of €203. It is an insult. The people have said it and been clear. We are saying it and we are clear. I hope the Government considers supporting this motion.
Every year, workers are forced out of their employment for no reason other than they have turned 65 years of age. Irish law allows their age to be the defining factor on whether they can continue in employment, regardless of their ability to carry out the work. This is possible because Irish law allows employers to impose mandatory retirement ages on staff contracts of employment, facilitating ageism within the workplace and creating a set of second-class employment rights for older workers.
Every worker in the State makes a significant and valuable contribution during their working lives. We talk about looking after older people who have contributed to the State throughout their lives, yet we force them onto the dole queue when they hit 65. We all know the vast majority of people at 65 will not get a job. At a time when citizens should be able to take their foot off the gas or continue working, this Government wants them to sign on the dole. It is a charade in which the Government is forcing older people to take part. To make matters worse, it wants them to take part in the charade for less money than they would have got on their pension. That is rubbing salt into the wounds.
Workers should have the right to retire at 65 with their State pension or the freedom to remain in work if they so decide. The Government cannot keep moving the goalposts when it comes to the retirement age for the State pension, from 65 to 66, and to 67 in the new year. The Government’s next move will be to increase the pension age to 68. Where will it stop? That is a real concern. A pension age of 68 would be one of the highest in the OECD. If someone wants to retire at 65, that should be their choice, taking into consideration their physical, mental and family circumstances. They must also have the choice to work on.
I thank my colleagues, Deputies O'Reilly and Kerrane, for bringing forward this important motion.
As other speakers have mentioned, increasing the pension age was a significant issue on the doorsteps in the last general election. I did not hear anyone disagree with our proposal at any of the meetings or debates I attended, so I do not think there will be any difficulty with everyone supporting the motion before the House this evening.
As a society, we should be striving to ensure that if people want to retire at 65, the choice is theirs. If people want to continue to work, that is their personal choice but they should not have to continue to work. People should be able to retire at 65 if they wish. A number of employment contracts stipulate an end-of-employment date in line with when an employee turns 65. Since the abolition of the State pension transition payment, thousands of 65-year-olds have had to sign on for a jobseeker's payment. I have come across many people who do not want to put themselves through the experience of having to sign on for any sort of transitional payment. They feel they have worked hard. Many of those we are talking about have been working since they were teenagers. They feel they should be able to get the pension at 65 rather than having to avail of an in-between payment or jobseeker's allowance.
I also wish to refer to women in the context of pensions. Although women outnumber men among the over-65 age cohort, women only account for a third of those in receipt of a full State contributory pension. The National Women's Council of Ireland, NWCI, has called for a rethink of our pension policy to become one that places equality and living with dignity in older years at the centre. I wish to mention that in particular because once again we have women being failed by the State. I do not think any of us are surprised by that at this stage, but it is an important issue.
Many people in receipt of a pension have often said they feel like a forgotten category in the country. Their cost of living has increased and every now and again they get a paltry €5 increase. It is important that we remember them. The cost of living does not reduce just because one turns 65 or 66. Sometimes, it is very difficult for elderly people to live on a pension, in particular when they are more dependent on medical services and have increased fuel costs. We are great at setting up age-friendly initiatives and other such initiatives, but we are not very good at following through on actions that support them.
Nuair a dhéantar conradh le daoine - agus táim ag caint ó thaobh an Stáit de - ba chóir cloí leis. Tá a lán daoine ann atá ag sroicheadh aois phinsin anois. Bhí conradh déanta ag an Stát leo. Gealladh dóibh, nuair a shroichidís 65 bliain d’aois, go mbeadh cead acu dul ar an bpinsean le hiomlán an phinsin acu. Loic an Stát orthu le déanaí. Loic an Stát orthu faoi na Rialtais dheireanacha. Is mór an trua é sin, agus is drochnós é bheith ag loiceadh ar dhaoine. Tá sé luaite ag na Teachtaí romham an fáth go bhfuil daoine ag iarraidh dul ar pinsean. Tá a lán acu briste tar éis 40 nó 45 bliain ag obair. Tá an droim briste. Tá an tsláinte briste. Tá an mheabhair briste, fiú, ag roinnt acu. Tá daoine eile i mbarr na sláinte agus tá siad ag iarraidh sult a bhaint as na laethanta deireanacha atá acu. Tá súil agam go bhfuil níos mó ná 30 bliain ag a lán acu. Tá siad tar éis íoc isteach sa chiste sóisialta agus tá siad i dteideal an t-airgead sin a fháil ar ais, i bhfoirm an phinsin. Is é sin an fáth go ndéantar é sin a íoc.
We must change our attitude to pensioners. They have been promised that they would be paid once they reach 65 and that they would be looked after by society. That is not the case. As other speakers have mentioned, utilities in this country cost a fortune. Most pensioners I know are worried about where the money is going to come from to maintain their houses, pay their rent if their landlord increases the rent or throws them out, or for food. They know that what little savings they have will not last. While people should have the right to remain in work, they should also have the right to retire at 65 as they have been promised. The pension they have paid into should be fit for purpose in order that they can enjoy their retirement, and not just survive it.
I thank Deputies O'Reilly and Kerrane for bringing this important motion to the House tonight. People should be entitled to retire at the age of 65 on a full State pension if that is their choice. It is unacceptable that they are expected to sign for jobseeker's benefit at the age of 65. The decision to get rid of the State pension transition payment was cynical and that must be reversed. The sum of €45 a week might not sound like a lot of money to some, but it makes a big difference to people who are struggling to make ends meet. It is heartless to expect people to wait for their pension and then to go on and penalise them in the process.
People had their voices heard during the last election. They told us they want the option to retire at 65. Talk of increasing the pension age to 67 or 68 targets those who are in the last few years of their working life. The Government is seeking to move the goalposts just when these people are looking forward to retiring. This debate should be about giving people a choice. Many people want to work beyond the age of 65, even well into their 70s. They should have the right to do that if they feel fit to do so, but we must act now and give people a right to access their pension at the age of 65 if that is what they want to do. They have worked and contributed to their pension for 40 or 50 years. The Government cannot continue to treat those reaching the age of 65 with such disrespect. They have been the backbone of every sector in society for the past four or five decades and they deserve to be treated with dignity by the Government. I hope everybody will support the motion tonight.
I thank the Deputies for raising this important topic here tonight. It featured heavily in last year's election, but even before that because it was something that was debated quite a lot in the Houses, probably since 2007 or 2008. At that stage we needed to have a national conversation about it, which probably did not happen. It was not led by anybody at that stage but it is important that we are having this debate tonight and that the Pensions Commission is doing its work, which is leading the national conversation on the work we are going to do in this area as well.
As Minister of State in the Department of Social Protection, I welcome the opportunity to discuss the State pension this evening on behalf of the Minister, Deputy Humphreys, and the Department. The Government recognises that the State pension age was one of the most important issues that arose during the last election. The public were very clear that they wanted a new approach and a new conversation in this space to see where we would go, bearing in mind that most people are responsible with the public finances and how we have to pay for all this as well. That is why, when we formed this Government, we gave it very specific attention in the programme for Government and set out a range of commitments on which we have been following through.
As per the commitment in the programme for Government, the Pensions Commission was established last November by the Minister for Social Protection, Deputy Humphreys. As we are all aware, the public policy and social issues underpinning the funding of a sustainable and adequate State pension system are complex. The Government, therefore, wanted to get an impartial examination of the situation and an independent assessment of what would be required to sustain the State pension system and what may be possible for the future. Even all those who raised concerns on this around the time of the election and prior to it want to make sure we have a sustainable system in place that guarantees the funding will be there to pay pensions well into the future, not just for them but for their children and grandchildren.
That is the reason we established the Pensions Commission with care, ensuring it had a gender-balanced membership with extensive experience of social and public policy, and the necessary expertise to grasp the potential impacts of any proposed pensions reform options. The commission is examining both sustainability and eligibility issues in respect of the State pension and the Social Insurance Fund. In that respect, it has been asked to develop options for the Government on issues such as qualifying age, contribution rates, total contributions and eligibility requirements.
It is also considering the issue of retirement ages in employment contracts that differ from the State pension age, which I note is one of the points raised in the Sinn Féin motion. In addition, the commission is looking at the issue of pension provision for long-term carers, which all Deputies will agree is very important. To date, the commission has met on 15 occasions, with further meetings planned. As part of its work, it has held an extensive consultation with a wide range of stakeholders, including the general public, representative groups and associations, and national and international public and advisory bodies. As part of this consultation, the commission has received 220 detailed submissions. It has also conducted an online stakeholder forum, which included detailed presentations from a range of representative groups, and it has engaged with a range of national and international experts to inform its decisions in this space. Lest anybody be in any doubt, the Pensions Commission is very much getting on with its work, and rightly so. That is the challenge it was given, namely, to advise the Government in this space.
As a Government, we want the commission to be able to carry out its work independently and unfettered. That is why, as committed in the programme for Government, last December we passed legislation to defer the planned increases in the State pension age pending the report of the commission and its consideration by the Government. That decision was not taken lightly. We understood it was important to let the commission do its work and bring forward its advice. That measure will cost €221 million in 2021 and approximately €453 million in a full year. As also committed in the programme for Government, earlier this year we introduced a new benefit payment for 65-year-olds. People who retire at the age of 65 and avail of this payment do not need to attend an Intreo centre to sign on, they do not need to be available for or genuinely seeking work, and they are not required to participate in any activation measures. That was a sore point for many people. They felt that having worked all their lives, they should not have to join those queues, go to the Intreo service or actively seek work. It was a big issue and people did not like it. Even though it had been debated for years, it certainly was not communicated and people did not have the chance to contribute to that debate in those years. It was important that we paused this and took another look, while bringing in that benefit for the moment. Unlike jobseeker's benefit, which lasts for nine months, a person who retires at 65 can avail of the payment for the full year until they reach pension age at 66. That is dealing with another issue in that, under the previous scheme, the payment ran out after nine months.
It is important to note the social insurance contribution requirements for this payment are not as high as for receipt of the State pension and people retiring at 65 should, in most cases, easily meet the required PRSI conditionality. While it was only introduced in February of this year, there are already over 2,600 65-year-olds benefiting from the new payment.
Speakers referenced the issue of adequacy. From an adequacy point of view, the Irish State pension is regarded as successful at protecting pensioners from poverty. However, we also want to continually improve the pension offering, which we have done for many years through successive Governments, and to improve the rate at which it is paid in order to give people a more comfortable retirement and to enable them to have the quality of life they deserve. When increases are sanctioned, we will always have a view on pensioners living alone and those on single pension incomes in a household. We recognise the difficulties if people are living alone and trying to run a household. Pension rates in Ireland compare very favourably with other jurisdictions. Again, we recognise that is what is needed to give the quality of life that goes with that.
Sinn Féin members do not like comparing this to the North, where they have a decision-making role. When we compare this with the North, they always say it is someone else's fault, but the reality is that the contributory State pension here is over €248 and in Northern Ireland it is considerably less, at £175, or about €195. That is the reality. They will always blame somebody else. I know they are not in government there on their own but they are responsible for decision-making in the North, whether they like it or not. Repeatedly, we in the South are expected to judge Sinn Féin on what they say they would do if they were in government in the South, not what they actually do when they are in government in the North. We should bear that in mind when we have these debates. I am conscious the North gets an envelope of money from Westminster and I accept that too. However, there are decisions to be made as well.
I did not interrupt anybody.
In any discussion on pensions, we need to look at one simple, inescapable fact, namely, people are living longer. We have to accept that, plan for that and budget for that, and make sure the resources are in place for the lifetime of the pension. In 1971, the average life expectancy was 71 and, thankfully, by 2016, that had risen to 81. A person who reached 65 years of age in 1971 could expect to live to the age of 77 and, in 2016, that had increased to about 84. That is a positive development for our country and one we are trying to allow for in all our policies and plans, not just when it comes to the pension age but also housing for the ageing and every other policy document we bring forward as well. Of course, it is hugely welcome that people are living longer and healthier lives but it does present its own challenges, challenges we have to meet collectively and responsibly.
In 1997, spending on pensions was €1.7 billion. By 2010, this had increased to €5.8 billion and by 2019, the cost had increased to over €8.2 billion, so the numbers have really jumped in recent years. This expenditure increase is due in no small part to the ongoing increase in pensioner numbers. Some 743,000 persons over the age of 66 are expected to benefit from State pension payments next year. This is an increase of over 150,000 people in ten years. About 40% of the total social welfare budget is spent on pensions, up from 28% in 2010. Whether we like it or not, this has obvious implications for the ability of the State not only to fund pensions but also to allocate resources to other priorities. I was involved in the document considering housing options for those who are ageing, an important document looking to the future and looking to give people a choice. Deputy Aengus Ó Snodaigh raised the issue of security for people in rented accommodation as they age and move onto the pension. It is important across all Departments that we recognise that policy changes and implementation are needed. It also has implications for intergenerational equity and fairness.
The sustainability of State pensions is not an issue unique to Ireland. This is a conversation that is happening all over Europe. In Northern Ireland, the pension age was increased from 65 to 66 last year and I believe it is planned to increase it again to 67 by 2028. It is easy to be populist but the bottom line is there are no easy options on this, and that is the case for governments across the world. This is an issue that has to be dealt with in the fairest possible way. That is why an independent commission to bring evidence to this and to allow evidence-based decision-making is appropriate, and it is one the Government will respond to. There is a duty on every Deputy in this House to ensure we do not jeopardise the future of the State pension system by taking short-term, populist approaches to this matter. The decisions we make today will not only impact those approaching retirement age but will have long-term and far-reaching implications, particularly for today’s younger generations of workers, who through their social insurance contributions and taxes are paying for today’s pensioners, but also for our children and their children when they reach retirement age over the coming decades.
While the Government will not oppose the motion, I want to be clear that we will be allowing the Pensions Commission to continue with its work independently and giving it the necessary time to finish its deliberations and report to the Government independently, based on evidence and assessment of where we are going with this. I expect that will happen in the near future and it would be inappropriate to pre-empt its conclusions and recommendations at this time. Once its report is finalised, the Government will consider the options and recommendations set out by the commission and, as promised in the programme for Government, will take action within six months.
As much as the Government might want to ignore the message sent in the 2020 general election, Sinn Féin is here to remind it that the pension age was one of the biggest issues in the course of that campaign. Voters sent a clear message that they wanted to restore the right to retire at 65 on the full pension rate, and Sinn Féin is making good on its promise to continue to campaign for that very right. However, despite the message that was sent loud and clear, the Government has failed to act. Instead, it has opted to stall the matter and resist bringing about the change that people called for. While the legislation that had sought to raise the State pension even further has been repealed, there is still a need for a new law to replace it.
This is where the Pensions Commission that was appointed by the Government last November comes in. It is expected that when the commission reports in the very near future, its findings will influence the course of action the Government will take. However, there is considerable concern that the commission does not include any representative from the groups who are particularly affected by pension changes and who will be the most affected by the decisions informed by the commission’s report. We have seen concerns about the gender pay gap and the glitches around those who are required to retire at 65, yet neither the NWCI nor Age Action is represented on the commission. Let me remind the House that the NWCI said that the commission "lacks the balance needed to arrive at conclusions that can accommodate a range of interests, especially those most affected by any pension age increase".
What this Bill also seeks to do is to resolve the issues that successive Governments have seemed incapable of resolving. Only recently, a constituent who is approaching pension age contacted me to ask why, if they choose to work past their retirement date, their PRSI contributions will not be counted towards their State pension.
We seek to address that in this motion.
We also demand a commitment from the Government to restore the State pension transition payment for those retiring at 65 years of age. The Government's handling of this issue has been chaotic and shows a total lack of appreciation or regard for the years of service these citizens have put into supporting the State. They now deserve to be supported through just and comprehensible policies.
Sinn Féin is also calling for mandatory retirement to be abolished in most cases and for workers to have the choice to work or retire as long as they are fit to do so. For those workers who choose to work on, they should be able to do so on their own terms and not be compelled to sign fixed-term or short-term contracts of employment. We have tabled this motion because it represents the message sent in the last general election, and because the current Government cannot understand that our workers deserve the right to retire at 65 and the choice not to.
The Government intends to raise the pension age to 67 from next year. Forcing people to work for years longer when they were planning and expecting to retire is wrong. It is even more wrong because those of us in this Parliament who are making these decisions and forcing them on people are not being asked to do the same. In 2028, the Government intends to raise the pension age to 68. This has been met with widespread opposition from trade unions and the wider workforce. My union, SIPTU, launched its Stop67 campaign. It understands that many workers, especially manual workers, cannot physically do the work that they have done for decades. Bricks and blocks do not get lighter as people age.
Under pressure during the last election, one Government party, Fianna Fáil, promised to at least restore the transition pension so that those aged 65 did not have to sign on for the dole for a year after retirement. So far, An Taoiseach and Fianna Fáil have not delivered on that promise. By removing the transition pension, the last Government unofficially raised the retirement age to 66. As a result, many 65-year-olds who plan to retire cannot afford to stop working. This is unfair, callous, and wrong. The Government must stop its attempt to force through the planned increase of the State pension age to 67 in 2021. It must restore the transition pension and the right to retire at 65. Those workers have worked hard all their lives, paid their taxes and paid into the system. They deserve their pension at the full rate. They should be treated fairly and with dignity. Working beyond 65 must always be a choice that workers make for themselves. Some may wish to keep working and should be enabled to do so. Others will want to retire and enjoy the fruits of their labour. No one else should force them to make those decisions.
I welcome the chance to speak on this important motion. The State pension age was a significant issue at the time of the last election and it remains a significant issue for thousands of people across the State. Sinn Féin will continue its campaign until the Government's plans to raise the pension age are scrapped and the pension age is restored to 65. The Government plans to raise the pension age next year to 67 and to 68 in 2028. The State pension transition payment has been abolished, leaving thousands of 65-year-olds having to sign on for jobseekers' payments. Thousands of people are in receipt of a €203 jobseeker's payment instead of the State pension, which is €45 higher per week. This amounts to an annual loss for a person who retires in this State of €2,355 per annum. These are people who have worked hard all their lives. Some have worked hard in physical jobs for decades. They have earned their right to retire at 65. They paid their taxes, which the Minister of State seems to forget. When people get to pension age, they have already paid their taxes for their pension. They have paid social insurance contributions all their working lives.
Some Deputies, the people who are making these unjust laws, can retire from the age of 50, should they choose to. Some will be retiring to enjoy big fat pensions. We cannot have one rule for people in here and another for everybody else. It is wrong to make people's working lives longer without giving them any say or choice whatsoever. We support those who wish to remain at work after 65. People should not be forced to stop working against their wishes. We need a fairer system that suits people's needs as they reach the traditional retirement age. We have to support those who want to continue working, for example by ensuring that their PRSI payments count towards their State pension. We must also respect that others will want to retire at the age of 65. We need an end to mandatory retirement. We need to restore the State pension transition payment and we need to keep the pension age at 65. We need action. There has been too much flip-flopping and indecision by Government. We know what the people and unions want, and we fully support them.
Ar an gcéad dul síos, tréaslaím le mo chuid comhghleacaithe, na Teachtaí Kerrane agus O'Reilly, as an rún tábhachtach seo a chur os comhair na Dála anocht. Ba léir ón toghchán anuraidh cé chomh tábhachtach is atá ceist aoise an phinsin don ghnáthdhuine. Bhí an cheist seo i mbéal an phobail, agus ba bheag teaghlach a labhair mé leo agus mé ag stocaireacht nár ardaigh an cheist seo. Níl sé féaráilte, agus mothaíonn daoine nach bhfuil, go mbeadh daoine ag obair a saol ar fad agus iad den tuairim go mbeidh sé de dheis acu an pinsean a fháil agus iad 65 bliain d'aois agus go bhfuil an Rialtas anois ag rá leo nach é sin mar a bheidh sé agus go mbeidh orthu liúntas cuardaitheora poist a fháil, cé go mothaíonn siad go bhfuil sé in am dóibh críochnú suas lena bpoist agus go bhfuil sé ródheacair dóibh leanúint orthu. Tá sé togha dúinn mar Theachtaí a rá gur féidir le daoine leanúint orthu ag obair agus iad ag éirí níos sine ach bhí fear amháin ag rá liom go raibh sé ag obair ar feadh a shaol san earnáil tógála agus nach raibh sé in ann leanúint air ag dul suas agus anuas dréimirí agus é ag an aois sin. Bhí air dul ar liúntas cuardaitheora poist don chéad uair ina shaol agus é i ndáiríre ag aois a phinsin. Bhris sé sin a chroí. Tá sé soiléir ó na daoine go gcreideann siad go láidir go gcaithfear é seo a athrú. Táim tar éis a chloisteáil ón Aire Stáit nach mbeidh sé ag cur in aghaidh an rúin. Ní ionann é sin agus tacú leis an rún agus leis na daoine atá ag rá go soiléir go bhfuil siad ag iarraidh an pinsean a fháil ag 65 bliain d'aois. Is é sin atá á rá ag daoine agus is é sin an rud ba chóir tarlú.
Given that we are on the topic of pensions, I raise a related matter with the Minister of State that I hope he will look at. It concerns the PAYE tax credit as it relates to the contributory pension. The Finance Act 2013 did away with this credit as it applied to dependents. For example, a husband could avail of this tax credit as it applied to his own contributory pension but not to his wife's pension as was previously the case. This means that some dependents now have a tax liability. This issue mainly affects older women. I ask the Minister of State to examine this and to support our motion in full.
The Labour Party supports the motion. I want to raise some issues in respect of the Pensions Commission, which the Minister of State has spoken extensively about. We are struck by the IBEC submission. One of its key recommendations calls on the Government to remove the necessity to objectively justify a post-retirement fixed-term contract. We believe that this is a retrograde step that would give employers the green light to discriminate against workers on the grounds of age. While plenty of sticks and stones are thrown at the Labour Party about our time in government, we must remember that it was a Labour Party Minister of State, my colleague, Deputy Aodhán Ó Ríordáin, who introduced vital legislation in 2015 to protect working people and bring laws to prevent age discrimination in line with European case law. We must protect the provisions set out in section 6(3)(c) of the Employment Equality Act at all costs. This vital legislation prohibits employers from "offering" a post-retirement fixed-term contract without any requirement to objectively justify it.
It is vital that is protected. A move though to row back on this or amend this legislation, as some are calling for - I hope the Government will resist those calls - would set back workers' rights and equality rights by decades, which would be unacceptable.
The reality is that many workers wish to remain in their employment until at least their State pension becomes payable due to their continued ability to do their job and that they would see a significant drop in their income if forced to retire. The recently introduced benefit payment does not address this issue. Let us call a spade a spade here and be honest with each other about the debate that we are having tonight about the benefit payment. It does not address the issue. Addressing this issue requires legislative change.
The Employment Equality Acts 1998 to 2015 state that an employer cannot discriminate against a worker on the grounds of age. The Act allows, but crucially does not require, employers to set a mandatory retirement age for workers provided it can objectively be justified by legitimate aims. Therefore, where we have legislation which allows for workers to be retired by a particular age, it will not be regarded as age discrimination if it is objectively justified by a legitimate aim. However, such an aim most include legitimate employment policy, labour market and training objectives for it to be in line with the EU's directive on equal treatment in employment and occupation. That is the law. That is where we are and there can be no going back on that. These decisions must be justified rather than the decisions of individual employers. The Labour Party believes that is missing from tonight's motion, although it addresses it to a certain extent. As well-meaning as it is, it falls short on a crucial element the Stop67 campaigners are calling for, which is a statutory right to remain in the job.
We are supporting the motion. I listened very carefully to the Sinn Féin contributors to the debate. De factoSinn Féin is calling the retirement age to move to 65. I do not think there is any ambiguity about that. That is my understanding of it. The motion states in the first line that "workers in the State make a considerable tax contribution throughout their working life and should have the right to access the full pension rate of payment when they retire at age 65". In other words, it wants to move the retirement age from 66 down to 65. The final Sinn Féin speaker might clarify this for us. The motion calls on the Government to "commit to restoring the State Pension Transition payment for those retiring at 65 years of age". I may be misinterpreting the motion but I ask for clarification. If the motion is calling for the retirement age be reduced by 65, I imagine it negates the need for the State pension transition payment to be reintroduced at 65 years of age. However, I may be missing some logic there.
We support the motion and we support the work of the Pensions Commission. We need to be cognisant of what is already in law. When the Pensions Commission makes its final deliberations, hopefully it will not recommend any unwinding of pre-existing law particularly in respect of arguments Stop67 has so stridently put forward, and which we have all adhered to. The Employment Equality Act is existing robust legislation. We need to ensure that fixed-term contracts are dealt with properly in the context of the Pensions Commission. We all wait with anticipation for the report of that commission. Ultimately, it will be for this House to decide where it goes thereafter. The Labour Party is setting out its stall tonight in respect of post-retirement fixed-term contracts because we believe that issue will be very high on the agenda.
We support the motion; there is no ambiguity about that. I just want to raise a minute, but significant issue on the benefit payment. The application process can be cumbersome for some people. On 15 June I asked the Minister if she would make the form for the benefit payment for 65-year-olds available to download and print, rather than on request only. The Minister responded to say that people can apply online, which is fine and many people will apply online. For those not able to apply online, the alternative is to make a request to the local Intreo office or through the Department's income-support helpline and it is posted to the applicant. If the form could available online for people to print it off and make their application it would help a significant number of people. It is a relatively minor issue. We do not understand the logic of not being able to print off the form itself. However, a significant cohort of people are not able to do that at the moment. I would be very grateful if that could be considered.
I thank Sinn Féin Members for tabling the motion which we in the Social Democrats will be supporting. As we start to emerge from the pandemic many of us have been forced to re-evaluate what is important in our individual lives and in wider society - family, health and friendship.
It might seem simplistic but we need to keep these learnings close to us. At the same time, we need to ensure flexibility and an assortment of values are represented. The value and meaning one derives from work cannot be thought of as universal. Some of us, I hope all of us here, derive immense pleasure from our work and find meaning in our lives through our work. Others work to be able to sustain their other passions and hobbies and for some their work is measured through care which has historically been undervalued and ignored.
It should not be a utopian idea to have better work-life balance through a four-day working week, flexible working-from-home options, a society which values life spent outside labour participation as much as in it and a society where it should be a privilege, not a stress, to grow old, where the frenzy relating to security no longer haunts our elderly population. Allowing our elderly to retire with dignity is the purpose of a pension system. The State pension is and must remain the most important pillar in achieving that.
Older people in Ireland have the lowest rates of poverty of any age group. The State pension is solely responsible for this. At any one time, approximately 85% of older people in Ireland would live below the poverty line if it were not for the State pension. Instead, that number is generally between 9% and 11% and has been so for the last decade. For this reason, the Social Democrats believe the Government’s priority on pensions should be to end the auction politics on pensions, by linking the State pension to 35% of the average wage.
There is also a need to align the retirement age with the pension age and adjust employment contracts accordingly. The Government should also look to introduce a system where people have the flexibility to receive the State pension earlier or later than the State pension age.
This should be about choice. People should have a choice as to when to leave the workforce, confident they will not be punished for the choice they make as the pension amount they receive would be reduced or increased on a cost neutral basis.
There are regular contributions to the discussion on pensions from the commentariat and members of the Government, all referencing the sustainability of the pension system and the fact that people are living longer. Successive Governments have done little to encourage or support longer working lives among people who want to work beyond the retirement age. There is rarely justification for mandatory retirement except, perhaps, in some very select professions and there is no justification for it when the Government is simultaneously talking about a pensions timebomb and insisting that we cannot allow our retirees the financial security they have earned.
The Social Democrats support this motion. If the Government acted on it, it would be doing something real to support workers on their own terms, supporting those who wish to have longer working lives. There is also a need to expand coverage to groups not covered by pension arrangements. We know of the contribution that care work makes. People, mostly women, who perform care work save the Irish economy, by some estimates, €20 billion per annum, be that by raising families or caring for elderly family members or family members with disabilities. They are literally saving the State billions per year, not to mention meeting a tsunami of need that cannot be met by our healthcare system, yet we continue to insult these individuals and the value of their work by providing no security.
A few weeks ago, I said in this Chamber that there is no greater injustice than someone spending decades caring for family members with disabilities facing a retirement of financial insecurity. This is the reality faced by many long-term caregivers. Thanks to anomalies in our antiquated breadwinner pension system they have no entitlement to a pension from the State when they retire. Nobody is more deserving of the admiration and support of our society than those who spend years, sometimes decades, in these caring roles. Aside from the social value provided, they save the economy billions of euros annually - a point that cannot be overstated.
The Pensions Commission is due to report to the Government at the end of this month. Included in its remit is the creation of a pension solution for carers. I sincerely hope that solution is one that ends the situation where understandable gaps in PRSI history or quirks in the means test often leave carers without any pension entitlement. The Government should begin to treat credited PRSI contributions the same as paid contributions as treating paid and credited contributions differently tells carers that society does not value their work as much as it values paid employment. That attitude is an anachronism in 2021. Public policy needs to reflect more modern thinking about what counts as valuable work in our society.
Family Carers Ireland hears from many carers every year who have no individual entitlement to a pension from the State. If they are lucky, they will qualify for some income through a spouse, but if married to a civil servant who was hired under the old pension regime or to a farmer who has land, even if that land has not been worked, they are usually left with nothing. A commitment from Government to the development of a dedicated long-term carers' pension scheme is the best way it can prove its support for carers. This scheme should target people who have delivered full-time care for more than 20 years regardless of their PRSI history and should pay a pension equal to the maximum contributory pension, which is currently €248.30 per week. In addition, there should be no means test.
There is no excuse for continuing to allow these anomalies in our pension system to fester, resulting in great financial uncertainty and instability into older life because of care work. I am reminded of the words of C.S. Lewis, "You can’t go back and change the beginning, but you can start where you are and change the ending."
I am sharing time with Deputy Bríd Smith. I first want to make a point that is relevant to this motion and to a number of other motions passed by the Dáil in the past number of weeks. The Government is taking an extraordinarily cynical approach to motions brought forward by the Opposition in that it is supporting them, with no intention of doing anything about the issues raised. They are doing this because they do not want to see bad headlines in the media to the effect that they are against something. Tomorrow, the Government will vote in favour of the Social Democrats motion on the national maternity hospital. A few weeks ago, it voted in favour of the motion on the national maternity hospital brought forward by the Leas-Cheann Comhairle and others and in favour of the People Before Profit-Solidarity Bill on the right to housing, but it has no intention of doing any of what was proposed, in my opinion.
The Minister of State, Deputy English, said in his opening statement that the Government will vote in favour of the motion, which is very clear in terms of the pension age coming back to 65, but simultaneously he said something that entirely contradicts that, that is, the Government is in favour of the Pensions Commission continuing its work and does not want to interfere with the work of the commission, etc. The Pensions Commission is a tool to take something out of the political arena because of the pressure the establishment parties came under in the course of the last election. If the Government is in favour of the pension age coming back to 65, why not pass that into law? What the Government has been doing over the last while is incredibly cynical. It has copped onto the idea that voting against motions that are popular is a bad idea so instead it allows everything to pass with no intention of doing anything. That is extremely cynical.
The fundamental point is that instead of increasing the retirement age, which I believe is still what Fianna Fáil and Fine Gael would like to do if they could get away with it politically, we should be bringing it back to, at least, 65. As a result of the Fine Gael and Labour Party decision to raise the age to 66, there are now 4,000 65-year-olds in this State out of work, unable to get the State pension and having to sign-on, effectively for jobseeker's allowance, and instead get €45 per week less than the pension. These are people who worked all of their lives, retired from their jobs at 65, and are now left to twist in the wind, unable to get a job, but not allowed to get the State pension. It is not good enough. The Government should hang its head in shame. This provision should be reversed immediately.
It says something deeply profound and bad about capitalism that people living longer is a crisis. We have a demographic timebomb. The idea that people could retire at 65 and live a comfortable retirement for a number of years is a crisis. These workers have been incredibly productive over the course of their lifetimes and they have created huge profits for their bosses, etc yet, it is unthinkable that we could make the employers and those who made the profits from their work pay for a comfortable retirement through increased employers PRSI.
Ireland is a wealthy country. Per person, we are the richest country in the world, but one would not think it looking at how the Government treats our older workers. Workers should be entitled to retire in comfort, but instead the Government is attempting, or would like to, push up the retirement age to 67 or 68. We can afford a decent retirement for all workers at 65 - a universal basic pension. The problem is Fianna Fáil and Fine Gael are more concerned with protecting the billionaires from taxes than they are with supporting the workers who have created that wealth. Their pensions are part of their wages. They are deferred wages.
I welcome that Sinn Féin has brought forward this motion pushing to reduce the pension age to 65. However, I would make the point to Sinn Féin that it is the real attitude of Fianna Fáil and Fine Gael on this issue from which they should draw some conclusions. Fianna Fáil and Fine Gael are not on the side of ordinary workers, pensioners or otherwise. Any coalition or compromise with these parties of the rich would mean betraying those who were looking for real change. We do not need, and should have a ruling out of, coalition with Fianna Fáil or Fine Gael and instead a fight for a left Government with socialist policies to stand up to the billionaires and bring down the pension age for workers.
I agree that the constant use of arguments around a demographic timebomb to justify a tax on pensions and the retirement age in general is outrageous. The attempt by the State to push out the pension age has had widespread political support and was first designed by the Fianna Fáil-Green Party Government and put into legislation by the Fine Gael-Labour Party coalition and it was part of the austerity response. It was also based on the idea that because people are living longer we cannot possibly pay a State pension at 65.
In 2011, in highlighting the significant challenges facing the Irish pension system, Joan Burton said, "The fundamental principle that people need to participate in the workforce for longer needs to be emphasised 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." She said the population aged over 65 was expected to more than double by 2050, increasing from 11% to 26%, because people were living longer and that spending on "social welfare pensions and public service occupational pensions, is projected to increase from approximately 5½ % of GDP in 2008, to almost 15% in 2050." There has been some rowback on the part of this Government with regard to pushing the retirement age out to 67. It has had to do this and to create this commission, which is stacked with safe hands. Of the 11 members of the Pensions Commission, three are civil servants, three are members of IBEC or similar bodies, two have legal backgrounds, two are economists and one is a token representative of the Irish Congress of Trade Unions. The Pensions Commission is a way to move this issue out of the political arena and was set up because the parties who came to a coalition deal, namely, Fine Gael, Fianna Fáil and the Green Party, felt political pressure during the general election.
The attack on the right to a State pension at 66 should be seen as a wider attack on all workers. The right to a State pension at 65 was a big gain won by the working class in the 1970s and all workers should fight today to retain it because those who are workers today will be retired workers tomorrow. We reject the demographic time bomb argument. People do now live longer. That is something to be celebrated rather than a cause of concern or a reason to impose another heap of austerity on people in their retirement. Workers living longer does not mean that those now working are less productive. In fact, while it may have taken five workers to pay the pension of one retired worker and while in the future it may take two or more to do so, the evidence clearly shows that workers are becoming increasingly more productive and that this is not being recognised in their wages or their pensions.
This problem can be addressed by increasing the rate of PRSI paid by employers. Ireland's employers pay one of the lowest rates of PRSI contribution in the EU at just over 10%. In Austria, employers pay 21% while in Germany they pay 45%. The EU average is 21%. We are laggards again and are once again behind. The attack on pensions reflects a wider crisis in the capitalist system. Instead of celebrating the longevity of ordinary people, some see it as something they cannot afford to take any risks with. We need to ensure that the right to retire at 65 is retained and that people can retire with dignity on a liveable income. If that means addressing wider issues such as the wider attack on pensions by employers and our country's status as a low-tax haven by increasing PRSI contributions, that is what should be done.
The auto-enrolment policy of the Government is deeply flawed. It will not deal with the crisis about which the Government talks and will only impose another tax on low-paid workers with no occupational pension. By its nature, it cannot affect workers whose PRSI contributions are so low as to not qualify for anything other than a State contributory pension. The growth of precarious low-paid work indicates how that will affect the current workforce when they are due to retire. This is part of the reason for People Before Profit bringing in the Industrial Relations (Provisions in Respect of Pension Entitlements of Retired Workers) Bill 2021 on 30 June. This Bill aims to give retired workers a voice. I hope we will get widespread support for the Bill from across the Dáil. The retired workers to whom I have spoken, some of a cohort of tens of thousands, have a slogan, which is that retired workers are not retired voters. The systemic attack on their pensions since the austerity measures were brought in by the Minister of State's party and by Fianna Fáil when the banking crisis happened has been absolutely punitive on them. It is part of the collective response of this system to retired workers, which is shameful.
Cuirim fáilte roimh an rún seo. I hope the parties will support the Aontú amendment to ensure convergence between the pension ages in the North and South of Ireland. At the moment there is a difficulty with regard to the pension in the North of Ireland.
It is symptomatic of the two-tier Ireland in which we live that when it comes to retirement, there is one rule for the elites and another for hard-working men and women. Deputies, whether they get voted of office or resign, will leave with golden handshakes to see them well and in wealth in their years of retirement. All the while, working men and women throughout the country live in fear and anxiety about whether they will have enough money to afford to retire. The gulf is enormous. A massive chasm exists in this country between the ruling elites and the people on the ground. I firmly believe that the vast majority of people in government do not even recognise how differently they treat themselves from the people on the street. If one were to look for an example of that, one need only look to the ongoing €25,000 a day for this building.
In November 2020, amid the global crisis in health and the economy, the Government voted to upgrade the golden handshake pensions for former taoisigh and top civil servants. The Government gave them a platinum handshake pension by restoring the cuts made to those pensions. It costs the taxpayer €12 million every year to do this. At the same time, the Government voted against giving any pay to student nurses. This is another example of how differently members of the Government treat themselves from the rest of the country. This can be contrasted with the failure of the Government to find so much as a tenner for pensioners in the €18 billion budget. Quite simply, there is a chasm between lawmakers and the people on the street. The hallmark of a civilised society is how we treat the most vulnerable. God knows that the most vulnerable in the crisis we have been through are the older members of our society. If the hallmark is how we treat them, the Government has failed very badly.
At the moment, people are in many cases obliged to retire at 65 under their contracts. They are then forced onto jobseeker's payments for one year before being allowed access the State pension at 66. That is an absolute nonsense. It again shows the lack of professional administration in this country. This strange year people experience at the end of their working lives shows a lack of ordinary competency in administration. Ireland is to have a pension age far older than those of the majority of our European counterparts. England does not plan to move its pension age to 68 until 2046, 18 years after this Government expects this move to be made in Ireland.
There will be a change in the demographics in the next 40 years. There will be just 2.3 people of working age for every pensioner. The new total contribution approach brought in to replace the old averaging system means that people need 2,080 contributions to qualify for a full State pension. That is the equivalent of 40 full years of PRSI contributions. Just under six in ten Irish workers have some sort of pension to supplement the State pension. We are looking at a major difficulty over the next while because of that. It should be remembered that many older people locked themselves into significantly long mortgages to buy their houses. It should also be remembered that there is a significant cohort of older people who are in rented accommodation while the price of rent is radically increasing. This is happening at a time when the opportunity to get the full pension is narrowing and when the age at which someone is eligible is getting older.
The Government says that it will launch an auto-enrolment pension scheme some time in 2022. People will make contributions equal to 1.5% of salary, rising to 8% after ten years of work. What progress has been made on this? When will the Government be in a position to fulfil this pledge? Will pensioners once again be left in uncertainty? Shameful brazen politics have been played in respect of the issue of pensions over the past while. In January and February, the pensions issue threatened to define the election of 2020. Fianna Fáil and Fine Gael had to quickly row back on their previous plans to raise the pension age. Significantly, they did so just to deal with the electoral backlash coming their way at the time. Fianna Fáil and Fine Gael decided to get together to put a pin in the grenade that was about to go off.
Both parties stated they would oppose raises in the pension age. However, like so many of the commitments from Fianna Fáil and Fine Gael, it disappeared like snow off a ditch once the election was over. What did they do? They pulled a very common trick in Irish politics and created a commission to do two things - kick the can down the road and transfer responsibility from them in the decision-making process. If the Government opposes the increase in the pension age, why does it not just state that it opposes it? Why the need for a commission at all? Why the inability to stand up for what one believes on obvious and simple issues of justice such as this? It is incredible that both Fianna Fáil and Fine Gael speak about opposing the raising of the pension age but both see a commission to do just that as being the solution.
My concern is that raising the pension age will be part of an economic payback for the fiscal mismanagement of the Covid crisis by Fianna Fáil and Fine Gael in government. It must be remembered that Governments have form in this regard. Successive Governments have sought to recoup economic losses at the expense of the rights and entitlements of the most vulnerable and hard-working in society. To bail out the banking sector in 2008, medical cards were attacked and retirees were told that although the crisis was not of their making, they were nonetheless expected to pay to bail out the offenders. Fast forward to today and this crisis, which is not the fault of older people, yet the Government has its eye on their pockets to see if it can pick them to pay for the costs of the crisis. In 2011, Fine Gael and the Labour Party in their first year in government legislated to raise the pension age from 65 to 68 incrementally. It was incredible for the Labour Party or any party that says it is based on the legacy of James Connolly to see the pockets of those aged 67 or 68 as the solution to the financial crisis the country was in. In the run-up to the general election in 2020, we saw Fine Gael and Fianna Fáil reject that policy for fear of losing votes but now their policy is actually indistinguishable from it and they are just awaiting the most politically opportune time to push through the increase in the pension age.
Aontú is an all-Ireland party. We are a 32-county Irish republican party. We want to see convergence on the island of Ireland in all aspects - economically, socially and in the delivery of public services - but we also want to see convergence with regard to incomes and pensions. It is wrong that pension ages in the North of Ireland are different from those in the South of Ireland. It is important that political parties speaking on this side of the Border do so with the same language up North as well because people in the North of Ireland listen to what parties say here and they want to make sure the parties fulfil those words in the Six Counties too. We in Aontú have proposed an amendment seeking the convergence of the pension ages North and South and we ask the political parties here to support that amendment.
The motion states that there are now thousands of 65-year-old people on the jobseeker's social welfare rate of €203 per week instead of the State pension rate. There is a difference of €45.30 between the jobseeker's payment and the State pension, leading to an annual loss of €2,355.60 for pensioners. The urgency with regard to the pension age issue, as provided by the Government, is that there is a massive financial cost coming down the tracks as a result of the increasing number of older people. However, this is a shameful position to adopt and we must see it in context. For example, why should pensioners and ordinary workers bear the brunt of this cost when the Government is creating unsustainable and record levels of public debt in areas such as the national children's hospital and the Climate Action and Low Carbon Development (Amendment) Bill 2021? The annual cost of the climate change Bill is in the region of €20 billion, as confirmed by the International Monetary Fund, and the overrun to date on the national children's hospital is €1 billion, so why should ordinary workers and pensioners, who worked hard and served this country so well, bear the brunt of the Government's reckless decision-making when it comes to finances and how it deals with people in a fair manner? It is clear that the Government does not care about pensioners and it is not dealing with workers in a fair manner. What is happening here is that it is presiding over chaos and affecting the lives of too many people. It needs to reflect on that and be fair to pensioners.
I fully support the motion to restore the pension age to 65. The pension age was a key issue in the general election in February 2020. Voters across the State expressed their opposition to the pension age increase throughout the election campaign. The Fianna Fáil and Green Party Government that was in power from 2007 until 2011 decided to increase the pension age to 67 in 2021 and to 68 in 2028. The subsequent Fine Gael-Labour Party coalition put that into law in 2011.
The current Government pledged in the programme for Government to keep the pension age at 66 pending the recommendations, to be delivered within a year, of the recently established Pensions Commission. The approach of this Government to every issue now seems to be to establish a review or a report. It is a delaying tactic to buy time and hope the issue will simmer. It is grossly unfair and deeply disingenuous. This delay is causing great uncertainty for many citizens.
In any civilised society that respects its workforce, people should be entitled to a pension at the age of 65. Let us not forget that the only people who are not entitled to the pandemic unemployment payment are those over 65 years of age who are still working. These people again were left behind. Irish people cannot wait for another protracted report or review. They deserve to know where they stand. Fianna Fáil has been all over the place on this issue. Last year in the Dáil, it rejected a call for a State pension age of 65 but then agreed to defer the increase in the pension age to 67. It is making it up as it goes along. Every worker in the State makes a considerable tax contribution throughout his or her working life and should have the right to retire at 65.
In the few seconds I have left, I refer to a meeting held this evening between the Rural Independent Group and members of the taxi forum. I ask the Minister of State, Deputy Ossian Smyth, who is present, to go back to the Minister for Transport, Deputy Eamon Ryan, on this issue. Taxi drivers are in a crisis situation. They need a taxi wage subsidy or a business subsidy to survive the pandemic. At least while they are trying to get their business back up and running, they need some kind of wage subsidy scheme to be put in place, as was done for other businesses but not for taxi drivers. That has to change. In addition, the ten-year rule relating to the changing of a vehicle has to be moved to 12 years in this crisis.
The pension age was a key issue in the general election in February 2020. Voters across the State expressed their opposition to the pension age increase throughout the election campaign. The Government told them that things like that would not happen. While in power from 2007 to 2011, Fianna Fáil and the Green Party decided to increase the pension age to 67 by 2021 and to 68 by 2028. Fine Gael and the Labour Party implemented that while in government in 2011. In 2020, those same parties went out and said they were not in favour of the increases in the pension age that were the doing of Fianna Fáil and the Green Party in 2007 and Fine Gael and the Labour Party in 2011. I spoke again last week about double standards. It is a great thing that there is social media now because people can actually go back and check the record with regard to what various governments, some members of which may now be in opposition, have done, and hold them to account. How dare they ask persons of aged 65 who have worked their whole lives for this country and paid their taxes to queue up to get the jobseeker's allowance?
How does the Government dare to do this? What it is doing is hypocritical. I hope every person of pension age, and every child and grandchild of those pension-age people, researches and sees exactly what Fianna Fáil, Fine Gael, the Green Party and the Labour Party have done to those people in their retirement years.
I support the motion. I am disappointed that an Teachta Tóibín's amendment, which I also support, was not put through, but I understand the situation. The difference between what people get on jobseeker's allowance and what they would be entitled to on the pension is €2,000 per year. It is a most ignominious insult to 65-year-olds to be told to sign on. These are people who were proud to work all their lives, raise their families and pay their taxes and dues. To expect them to sign on with other people, no disrespect to them, at the labour exchange is unacceptable. The sooner that is changed, the better.
The Minister of State, Deputy Ossian Smyth, is new to the Dáil, new to politics and new to this level of politics. I hope he will be able to exert some influence in this matter. What is being done is shocking. I was in the House when the representatives of the grey vote arrived here some years ago. They met at a church up the road and came down to the Dáil at the time cuts were made to medical cards. They put the fear of God into Fianna Fáil and the Minister of State's party at that time and, let us be fair about it, they also put the fear into me. Their muscles will be flexed again because they have been blackguarded right through the pandemic. They were locked up in their homes and had the life scared out of them by RTÉ, the national media and all the rest of them. People in that age group, including taxi drivers, bus drivers, ambulance drivers, publicans, self-employed people and many others, could not even get the difference between their pension and the pandemic unemployment payment. Total disrespect was shown to them in this regard. They had to pay for the sins of the banking crisis and now they must pay for the sins of this crisis and the way it has been handled. They must pay for the abysmal waste associated with the new children's hospital, which will probably cost €2.5 billion or €3 billion. We will discuss tomorrow the cost of the new maternity hospital, which has gone up from €200 million to €800 million. The behaviour of Governments, Ministers and senior officials has been reckless. Then we have the gold-plated pensions for former taoisigh, Ministers and public servants. It is shocking and disgusting.
I am telling the Minister of State that enough is enough. The pensioners of Ireland will not take this. They do not deserve it. Their children and grandchildren will remember what Fianna Fáil, Fine Gael, the Green Party, the Labour Party and some others did. As an employer, I know the situation is difficult, but all older people want is fair play.
I am very grateful for the opportunity to speak on this important issue. I, of course, support Sinn Féin's very genuine and heartfelt motion. My late mother always said one could judge any government or society on how it treats people who are getting to an older age and how those people are respected. Past governments certainly did not shroud themselves in glory in the way they treated our older people. When it comes to pensions, it should be about choice. If a person is in the good form and health that means they want to keep working, he or she should be allowed to do so. If a person is getting tired and wants to get out of the workforce, having worked hard, contributed, paid a great deal in tax and raised their families, to have more time to take a bit of ease for themselves, then, my good God, they are more than entitled to it.
I want to highlight some of the things that have gone on here this evening. When I see Labour Party Deputies saying they are going to support Sinn Féin's motion, by God I must say they are a hypocritical shower, of what I will not say. They had a special Minister in a previous Government who had the responsibility for being particularly horrible. I would call her the Minister for horribleness. I recall what she, in particular, did to older people, pensioners and women, and how women's rights were so desperately and detrimentally affected when it came to pensions. When I see Labour Party Deputies saying tonight they will support this motion, I can only say they are a hypocritical shower. That is exactly what they are to be doing that here tonight. Why will they not be true to their form and say what they said before, in 2011 and 2012? Will they not say here tonight what they said then about pensioners? Perhaps other people will forget what they did but I will not forget it and nor will I let anyone else forget it either.
I am sharing time with Deputy McNamara. I am grateful for the opportunity to contribute briefly to the debate on this motion, which I thank Sinn Féin for bringing forward. It was 1 December 2020 when we last debated a Sinn Féin motion on pension age, in support of the STOP67 campaign. Fortunately, there was enough public pressure on the Government at that time, and in the lead-up to the general election in February 2020, to pause the planned increase in retirement age to 67 years from 2021, even though that provision had been enacted in the Social Welfare Bill.
I listened with interest to the contributions of Labour Party Members in support of this motion. The electorate has not forgotten that it was the Labour Party, in coalition with Fine Gael, that first legislated for the phased increase in pension ages. In 2014, the age was increased to 66 years and it was supposed to increase to 67 years from 1 January this year and to 68 years from 1 January 2028. A State pension transition payment was introduced and then abolished, and 65-year-olds then had to sign on for jobseeker's payment. That payment is €45.30 less per week than the State pension rate. Why must the public always be expected to pay for the Government's ineptitude?
The Minister for Social Protection, Deputy Humphreys, gave us some insight when she said during the debate in December 2020: "We want to maintain a fair balance between those who are contributing to the system and those who are drawing from it." This reflects the particular quality of Fianna Fáil and Fine Gael that likes to pit cohorts of people against each other in their deservingness of, or access to, scarce resources. The programme for Government sets out a number of commitments regarding pension provision, specifying that it would be "[u]nderpinned by the principles of sustainability, adequacy, and fairness" and would involve "affordable changes". That is laughable. Changes cannot be called affordable if they do not include addressing the extortionate expenditure on tax relief for people with private pensions, which has cost the Exchequer billions over the years.
In discussing pensions, I always look to Social Justice Ireland for guidance, as it has consistently produced excellent analysis, proposals and fully costed measures to inform Government decisions. I suppose the clue is in the name, however. Why would Fianna Fáil, Fine Gael and the Green Party take advice from any group seeking, God forbid, social justice? The organisation has done a significant amount of work on the cost of providing tax relief on private pensions. In its 2018 paper, A Universal State Social Welfare Pension: Recognising the Contribution of all our Senior Citizens, it states:
. The Green Paper on Pensionsestimated a gross cost of €3,220m for 2006 while the Department of Finance's Tax Strategy Group estimated a gross cost of €3,035m for 2007...
The National Recovery Plan 2010gave the total gross cost of pension tax expenditures as €2,500m for 2010, comprising: the costs of tax relief on employee/employer/individual contributions to pension savings at €1,000m; the cost of the tax exemption for employer contributions as Benefit-in-Kind (BiK) in the hands of employees at €500m; and the cost of exempting from tax the accrued income and gains growth of pensions funds at €1,000m...
Collins and Walsh (2010: 24-25) estimated the total cost of tax expenditures allocated to private pensions in 2007 was €3,100m. In 2010, the Revenue Commissioners estimated a gross cost of €2,929m for pension tax expenditures (Revenue Commissioners, 2011).
There is a significant variation in the figures but all the numbers are huge and they show that the Government is governing for the few, not the many.
According to the same Social Justice Ireland report, giving tax relief on private pension contributions at 40% instead of 20% means that "[o]ver 70 per cent of the tax relief for private pensions accrues to the top 20 per cent of earners, with more than 50 per cent accruing to the top 10 per cent of earners." A change in this regard would, the report noted, be a . At the end of April 2021, in response to the public consultation by the Pensions Commission, Social Justice Ireland released a statement entitled "Disjointed Pensions Policy will fail Older People", in which it advocated for the following changes:
of tax relief on private pensions from 40 per cent to 20 per cent and second increasing employers PRSI by 0.5 per cent. These, along with some other smaller measures, would raise in the region of €949m, which is €200m+ more than the additional cost of the Universal Pension in 2019.
Social Justice Ireland has long advocated and put forward costed proposals for a universal pension scheme. However, as I said, Fianna Fáil and Fine Gael, two interchangeable parties, are about governing for the few, not the many. The Government committed to establishing the aforementioned Pensions Commission, the purpose of which was to "outline options... to address issues including qualifying age, contribution rates, total contributions and eligibility requirements".
The Pensions Commission was due to finish its work in June 2021. When will the report of the commission be available? The programme for Government states: "The Commission will report by June 2021", but the Commission's website states that it would meet fortnightly until June 2021.
I am out of time, but I wish to mention a few issues, including pension solutions for carers, the majority of whom are women; and the impact of the housing crisis on pensioners, as we have upcoming generations who do not own their own homes and therefore will not be living mortgage-free or rent-free into their pension years. These issues also need to be addressed.
I wish to thank the Deputies for the engaging debate. I would like to start by addressing some of the points that were made by Deputies, not all of whom are still present in the Chamber.
In response to Deputy Martin Browne, I wish to put it on the record that there is a member of the board of the NWCI who is also on the Pensions Commission.
In response to Deputies Seán Crowe and Munster, the Government has no plans in place to increase the State pension age at all. The Government removed the legislation that would do so and will await the publication of independent report of the Pensions Commission before any decisions are made.
In response to Deputy Gannon, the commission is also looking at benchmarking and index-linking the State pension at 34% of average earnings, and at a pension solution for long-term carers.
In response to Deputy Tóibín, who raised a point about auto-enrolment, I wish to underline that auto-enrolment is totally separate to the State pension.
As already outlined by my colleague, the Minister of State, Deputy English, the Government is very mindful of the debate that occurred during last year's general election campaign and has made considerable commitments in the programme for Government to deal with the matter. In that regard, the Government is absolutely committed to maintaining the State pension as the bedrock of the pension system in Ireland and to ensuring it continues to protect pensioners from poverty. We are spending over €8.8 billion on the State pension system this year alone. That amount is projected to increase substantially over the coming years and decades, given the considerable demographic shifts occurring in Irish society. That is why we must also ensure that we do not jeopardise the future of the State pension system with short-term thinking and that younger generations will also have an entitlement to the State pension system when their turn comes.
In February of this year, in keeping with our programme for Government commitment, we introduced the new benefit payment for 65-year-olds with less onerous PRSI eligibility conditions than those required for a State pension. So far, over 2,600 people have benefitted from this payment without having to be available for, and genuinely seeking, work, without having to undertake various activation measures and without having to turn up at their local Intreo centre to sign on. Through the introduction of that payment, we have delivered on our commitment in the programme for Government. We established the Pensions Commission last November to independently assess sustainability and eligibility issues in respect of the State pension and the Social Insurance Fund. The commission has engaged in an extensive public consultation process to ensure it is apprised of all relevant information and issues. The Government enacted legislation last December that will keep the State pension age at 66, pending the report of the Pensions Commission and the Government’s consideration of its conclusions and recommendations. The programme for Government commits that the Government will take action on the recommendations of the Pensions Commission within six months of receiving its report.
We need to be honest with people in this debate. There are no easy fixes. Governments across the world are grappling with the issue of pension sustainability. One only has to look at Northern Ireland and the UK where the pension age was increased from 65 to 66 last year and is due to increase again to 67 by 2028. The rates of payment within our own pension system compare very favourably with other jurisdictions. To be specific, the contributory State pension here is over €248 per week. In Northern Ireland, by contrast, it is considerably less, at £175 or approximately €195 per week.
As I have stated, the Government wants to ensure that the State pension remains the bedrock of the pension system in Ireland. That means ensuring that today’s workers, and particularly young workers, have access to a State pension into the future. While we are not opposing the motion this evening, having established the Pensions Commission, the proper and sensible thing to do is to await its independent assessment of the situation and then engage with its recommendations in a comprehensive manner. That will provide members of this House with ample opportunity for further engagement and debate on the matter. I look forward to that engagement being constructive and mindful of the overarching aim to protect this and future generations in their retirement.
Throughout this, I will remember the people I met on doorsteps during the election campaign last year who were about to retire, some of whom had done very difficult manual labour jobs throughout their lives and some of whom wanted to continue working. I will always be mindful of that in the decisions that are made in the future.
I welcome the opportunity to speak at the conclusion of this important debate. I thank all of the Deputies for their contributions this evening. I want to draw the Minister of State's attention to the fact that there is no representative from the NWCI on the Pensions Commission. There are named representatives on the Pension Commission. There is one representative from the ICTU and one from IBEC, but there are no specific representatives from the NWCI that I can see. I just checked it before I rose to speak. It is an important clarification to make, because as we know, women are impacted disproportionately by the pension situation.
I would not call it a "crisis". Although the Minister of State is right to reference the fact that Governments across the globe have to deal with the issue of pensions, it would be most helpful if the somewhat hysterical language were taken out of the debate. We are not facing a demographic time bomb. It is a good thing that people are living longer. We do not have a pension crisis or anything like it. In fact, what we have is an opportunity to look at the economy and how it is structured. We have an opportunity to look at low pay, precarious work and the way the Government has built and constructed the labour market. It provides an opportunity for growth, which is very important. It is important that we grasp the opportunity to fund our pensions through growth. By growth, I mean the growth of decent jobs and the elimination of precarious work. Decent well-paid jobs afford us an opportunity to grow and to ensure we put pensions onto a sustainable footing. That is important. It is an important lesson for the Government to take on board.
The Government must not demonise people who have worked all their lives and want to retire when they get to the age of 65. In fact, we should thank those people for doing their shift by offering them the opportunity to access the pension rate of pay when they get to the age of 65. That is what Sinn Féin believes. We know it is what workers want. Workers are not foolish. They do not seek out things that will cause the economy to crash. Indeed, I am sure the speakers from Fianna Fáil and the Green Party know well how to crash an economy. That is not what workers want. Workers want to know that the pensions they paid into will be available to them when they reach the age of 65. That is what this motion seeks to deliver. It seeks to facilitate workers accessing the pension rate of pay at the age of 65. It seeks to abolish mandatory retirement where that retirement is mandated within a person's contract and it seeks to allow workers to continue working on the same terms and conditions. Like other speakers, I was alarmed by the IBEC submission to the Pensions Commission that referenced the potential use of fixed-term or altered contracts. In actual fact, what we are looking for is an extension of a contract to facilitate a person to work on past the age of 65, and indeed, when they reach the age of 65 to have the ability to exercise choice. There is a lot of dignity in having a choice. For many Deputies, particularly on the Government side of the House, there is very little understanding of the options that are available to people.
Sinn Féin believes that people should have the right to access their pension rate of pay at the age of 65.
Much like the Minister of State in his speech, from an adequacy point of view, the Irish State pension is excellent at protecting pensioners from poverty. However, we believe that, at the age of 65, one should have access to that rate of pay. It is not the label that is put on it, or not calling it a pension, that is a factor in the alleviation of poverty. It is the rate one gets. Currently, the thousands of workers who hit 65 since the Government came in almost a year ago are on the jobseeker's rate, not on the pension rate. The Minister of State was right when he said, from an adequacy point of view, the Irish State pension is excellent at protecting pensioners from poverty. We are saying that they should be allowed to access that pension at the age of 65 when their shift is done and their work is completed.
I am not sure there is a massive understanding on the Government side of the House that when people do backbreaking work, such as waiting tables, laying blocks and working outdoors in all weathers, they are ready to retire when they hit the age of 65. Sinn Féin is saying to those people that we believe they should be able to access the pension rate of pay and have the dignity to choose. If they want to work on, they should be able to retain their terms and conditions of employment. If they want to retire, they should be allowed to do so and access the pension rate of pay.
There is almost unanimity, which is quite unusual, on this issue across the board. The Government said it will not oppose the Sinn Féin motion. I believe that is a little bit disingenuous, however. Not opposing something is not the same as supporting it. The workers watching this debate this evening, particularly anyone in the age bracket of 60 to 64, will want to hear what the Government is thinking, regardless of what commissions, reports or other mechanisms it has used to sideline this issue. On our part in Sinn Féin, we will ensure we keep this issue front and centre. We will ensure we make good on the commitments we gave to people on the doorsteps in 2020. Thanks to people like the STOP67 campaign, they have put this issue on the agenda for those parties that needed it.
I will finish shortly and give way. People know that we listened and heard their concerns. They know that we are using our time here this evening to keep this issue on the agenda. It suits the Government to have this issue off the agenda. We know from the Fianna Fáil-Green Party Government record that when its back is to the wall, the first people thrown under the bus are the minimum wage workers. If we do not keep this issue on the agenda, we know what will happen because we know the history of governments and how people are treated. We will keep this issue on the agenda and we will be as good as our word. We will push hard and continue to do so to allow people the opportunity to retire with dignity on the pension rate of pay at the age of 65.
I thank Deputy O'Reilly for giving me an opportunity to speak on this important motion.
During last year's general election, I was canvassing with the Sinn Féin president, Deputy McDonald, in Blackpool shopping centre in Cork. A number of people came up to us to explain how angry and frustrated they were at what they perceived as a betrayal by the previous Government and Fianna Fáil on the retirement age of 65. In particular, one man stood out. He told us he got his first job when he was 14 years old. He worked for 41 years non-stop in the same company, starting as a boy carrying wood and blocks to finishing up in management. He was retiring in March last year but the Government put him on the exchange. The previous Government put him on the dole, as he called it, and kept him on it. He said he never had a problem with jobseeker's allowance because whoever needed it was entitled to it. His problem was that after working for 41 years non-stop that the Government put him on jobseeker's allowance.
Where is the dignity and respect that people deserve? As Deputy O'Reilly said, they worked hard jobs all their lives such as in factories, shops and hospitals. They were denied the right to retire at 65 and, instead, were put on jobseeker's rate which is a lower rate than the pension rate. The Government said it will not oppose this motion. Will it support people who are 65 and give them the pension they deserve if they want to retire? Many people want to continue to work after 65 which we support. This is a rights issue. Many Government Deputies promised the retirement age and the pension for those people at 65. Those Deputies must stand by their word and live up to what they committed to.