Heather Humphreys (Cavan-Monaghan, Fine Gael) | Oireachtas source

I propose to take amendments Nos. 8 and 15 together. I am not accepting them and I will explain why. We just had the biggest report ever on pensions, which is the Pensions Commission report. We responded comprehensively to that by retaining the pension age at 66, introducing the new flexibility to allow people to defer their pension, providing a pension to long-term carers and the small, incremental increases in PRSI over the next five years, which will make the system more sustainable. We always said that in keeping the pension age at 66, because of the changing demographic, we would have to pay for that.

We are trying to make the pension system more sustainable in order that the young people of today can get a pension when they retire. The current system is pay-as-you-go and we pay for those who are pensioners now. That is the system in place and it will continue. We have the benefit payment for 65-year-olds. It is not means tested and someone can get it if they have their contributions.

The Government established the Pensions Commission, which looked at this issue and delivered a comprehensive report. The Pensions Commission concluded its detailed analysis of the State pensions system in late 2020 and recommended increasing State pension age rather than decreasing it. The Government decided not to increase the State pension age but instead leave it at age 66. In this regard, I do not believe a further report on State pension age is warranted at this time. The decision to retain the pension age at 66 means that PRSI increases will be required. The Government has set out the roadmap for increases over the next five years and that starts in October 2024. Those PRSI increases are required simply to retain the State pension age at 66.

Reducing the State pension age to 65 years would increase pension-related expenditure significantly. The estimated cost of introducing State pension payments at the age of 65 based on current pension rates is €355 million for one year only. In February 2021, I introduced the benefit payment for 65-year-olds. The benefit does not require a person to sign on, engage in activation measures or be available for and genuinely seeking work. The payment was designed to bridge the gap for people who retire from employment or self-employment at 65 years of age but do not qualify for the State pension until age 66. It is important to note that people under the age of 66 who cannot work for health reasons can apply for invalidity pension and disability allowance.

I take the point of the case of somebody who has a long work history and is genuinely not able to work. I am looking at it but I will have to bring proposals back to Cabinet on whatever I come up with. I understand the position particularly for the brickie who is not fit at 65 to haul bricks around. There are all kinds of new systems for construction but it is hard work and that is the bottom line. If they are self-employed, which many manual workers are, bringing back the transition pension would be of no benefit to them whatsoever, so that will not solve that problem.

We need to be honest with people on this. Every country in the world is struggling with pension demographics. Many countries have increased the pension age. In fact, the pension age was increased in Northern Ireland to 66. This Government is retaining the pension age at 66 and we are clear that we will need to pay for that with increases to the PRSI.

I ask for the Acting Chair’s indulgence. Amendment No. 7, tabled by Senator Ruane, sought a report on income adequacy for lone parents. I wish to tell her I am doing that report. I do not want to put it in legislation, but I will do the report.