Katherine Zappone (Independent)

What is the likelihood of people falling into poverty due to the increased age to qualify for a State pension? The Library & Research Service quickly produced a short paper that outlines the examples of two people to answer this question. Ms A retires at 60 years of age with 40 years of full PRSI contributions; Mr. B retires at 65 years of age with 40 years of full PRSI contributions. The research paper compares how they would fare if they retire in 2011 when the retirement age is 65 and in 2028 when it is 68 with reference to their incomes and that they are fully reliant on the State contributory pension. Based on a poverty line of earnings of €192 a week, the initial investigative comparison piece shows that if Ms A retires in 2011, she will probably spend five years in poverty. However, if she retires in 2028, she will spend nine years in poverty until the State contributory pension kicks in when she reaches 68 years.

For Mr. B, lucky enough to work until he was 65, if he retires in 2011 he does not slip below the poverty line because the rate for State pensions has been set to keep most retired people out of poverty. If he retires in 2028, he will spend four years in poverty, however. As the Minister knows, the question of pensions is such a complicated area that nearly every individual is a unique case with unique entitlements. Care must be taken not to make sweeping generalisations. I am providing some evidence that there is a need to fully poverty-proof the implications of increasing the pension age before it is enshrined in law.