Michael Brennan (Progressive Democrats)

The section refers to pre-retirement allowances. This was the only section to which Senator Terry's colleagues in the Dáil seriously objected but in the end we reached a meeting of minds. The pre-retirement allowance was introduced in 1990 for older long-term recipients of unemployment assistance, those who had effectively retired from seeking employment and, by extension, the labour force. It was initially aimed at those aged 60 and over but this was reduced to 58 in 1991 and reduced to 55 in 1992. The allowance scheme for single women was integrated with the pre-retirement allowance in November 1992. The requirement to be available and genuinely seeking work dose not apply to those on the allowance so monthly signing is not required. It is paid weekly and is equal to the rate of unemployment assistance. It is unemployment assistance that does not have to be signed for, for which there is no requirement to seek work and which is paid from the age of 55. Participation is voluntary. Some recipients of long-term unemployment assistance over the age of 55 do not opt to take this payment but instead stay on unemployment assistance, which means they must seek work. PRETA numbers have decreased from a high of 15,300 in 1994 to 11,000 at the end of last year. Almost four fifths of these recipients are male. Some 68% of new recipients are under 60 years of age although significant numbers over the age of 60 continue to apply for the payment.

In the legislation I propose that no new person will join this scheme from a date to be specified in September. As a result the scheme will be phased out over a period of approximately ten years as the current recipients, people over 55 years, reach pensionable age. Those currently on the live register and aged between 55 and 66 who might have transferred to this scheme will no longer be able to do so. The proposed change will not affect existing recipients of the scheme. Although this reform will lead to an increase in the live register of approximately 2,000, based on current inflows, this increase will happen gradually over a year and will be offset to some extent by the impact of the employment action plan, which is being extended to all age groups. Under the employment action plan FÁS assists unemployed people to get jobs. It formerly did not apply to people aged 55 and over.

The PRETA scheme came in when unemployment was high. To get people off the register the Government took the view that unemployed people over the age of 55 would never work again and there was no point in retraining, educating or talking to them. They were put on the shelf and paid the unemployment rate until they reached the age of 66 after which they received the pension. This is no longer appropriate. We should intervene with people over 55 years up to their pension age and beyond, help and encourage them to find new opportunities, training and education. I cannot touch the 11,000 people already on this because they have made lifestyle decisions and it would be unfair to interfere with them. It is not right to allow new people aged 55 to go onto a permanent pension with no arm of the State giving them any help, support or encouragement to find employment. That is not fair to them or to their dependants and that is why I have made this move.