Dáil debates

Tuesday, 22 March 2022

Ceisteanna Eile - Other Questions

Pensions Reform

9:20 pm

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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13. To ask the Minister for Employment Affairs and Social Protection her strategy to address any decrease in income arising from a removal of an exemption to pay PRSI on supplementary pension income, occupational and personal pensions, and public sector pensions as contained in the Commission on Pensions report; and if she will make a statement on the matter. [14818/22]

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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The recommendation of the pensions commission's report in relation to putting the cost of PRSI on private pensions is causing significant concern to people around the country, particularly those who are already in receipt of pensions and do not have the ability to make any further cuts to their wages.

Where are we at with this recommendation? What plans does the Minister have to give reassurance to those people who are on a private pension and who do not have any room for further cuts?

9:30 pm

Photo of Heather HumphreysHeather Humphreys (Cavan-Monaghan, Fine Gael)
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I thank the Deputy for raising this issue. The pensions commission’s report established that the current State pension system is not sustainable into the future without changes. In this regard, it set out a wide range of recommendations, including potential measures to broaden the PRSI base. In the interests both of older people and future generations of older people, the Government is currently considering these comprehensive and far-reaching recommendations very carefully.

As part of this consideration, the commission’s report and recommendations were referred to the Joint Committee on Social Protection, Community and Rural Development and the Islands and also to the Commission on Taxation and Welfare for their views. The committee published its views on 2 February 2022. The Commission on Taxation and Welfare submitted its comments on the PRSI-related recommendations at the end of February and indicated its support for the broad approach recommended by the pensions commission. These various views are now being considered as part of our deliberations and the Government will finalise its position in the coming weeks. It is really important that we complete that work before reaching conclusions on any one recommendation, such as the commission's recommendation to remove the exemption to pay PRSI on supplementary pension income, occupational and personal pensions and public sector pensions.

As the bedrock of the pension system in Ireland, the State pension is very effective at ensuring our pensioners do not experience poverty. This Government is committed to ensuring this remains the case for current pensioners, those nearing State pension age and today’s young workers. I hope this clarifies the matter for the Deputy.

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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I thank the Minister. It actually does not but I understand her timeline and her wish to try to come to a conclusion. I will express a concern. We had a debate here on the commission report some weeks ago. The Minister of State, Deputy Madigan, took the debate for the Minister, who was away. The Minister of State seemed to give a presentation in that debate that suggested a certain direction with regard to the pension age, which I would be very concerned about, and that direction seemed to be set.

On this issue, I have many retired semi-State workers from ESB, Bord na Móna, etc., in my area. Because they have that small pension, they are excluded from many other payments that those completely reliant on the State pension will get. Now, the proposal is that their small extra pension will be taxed even further for PRSI and they do not seem to be getting any extra benefits. As the Minister can imagine, they are very concerned. They do not have the capacity to make any extra income. Has the Minister looked at the implications of the pensions commission's recommendation for this cohort of workers?

Photo of Seán Ó FearghaílSeán Ó Fearghaíl (Kildare South, Ceann Comhairle)
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Before the Minister to responds, I am conscious there are two Deputies present who have not yet put their questions. If it is okay with her, I will ask the Minister to respond and then ask the two Deputies to introduce their questions. We will then take a response from the Minister if people are happy to proceed in that way.

Photo of Heather HumphreysHeather Humphreys (Cavan-Monaghan, Fine Gael)
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I thank Deputy Calleary. There are not going to be any easy decisions here. Some people want to cherry-pick the nice things and not deal with some of the other issues. I see this as an all-of-government approach. We have to bring it to Cabinet. I read the pensions commission report in its entirety. It is a comprehensive document that outlines the pros and cons and then comes forward with its recommendations. One thing I do know is that we must do something about it.

As we stand here at the minute, four and a half people who are working contribute to one pensioner. By 2050, there will only be just over two people working for every pensioner. We must, therefore, do something about this. It will be looked at in its totality. My officials are working on it at the minute and it is my intention to bring this forward through the Cabinet committee process. I am sure it will get much discussion. We will try to do everything we can to make sure we do it in the best interests of everybody. There are no easy decisions.