Richard Bruton (Dublin North Central, Fine Gael)
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Question 63: To ask the Minister for Social and Family Affairs his estimate of the likely increase in the Exchequer's exposure with regard to social welfare pensions; and if he will make a statement on the matter. [13276/05]

Bernard Durkan (Kildare North, Fine Gael)
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Question 265: To ask the Minister for Social and Family Affairs if adequate provision is being made to meet pension payments in 2010, 2030 and 2040; and if he will make a statement on the matter. [17437/05]

Séamus Brennan (Dublin South, Fianna Fail)
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I propose to take Questions Nos. 63 and 265 together.

In common with other European countries, the population of Ireland is aging as a result of a combination of increasing life expectancy and a declining birth rate. The decline in the birth rate is relatively recent and this, coupled with the effects of high emigration for much of the period up to the 1990s, has resulted in Ireland having the lowest proportion of older people in the EU, with 11.2% aged 65 years and over compared to the current EU average of 16.1%. The proportion of older people in Ireland will remain at broadly the same level for the next ten years, after which it is projected to increase rapidly to 15% in 2021, 19% in 2031 and 28% in 2056. A similar situation exists with the number of pensioners relative to the number at work.

The increase in the number of older people in the population will, of course, impact on pension costs in the years to come. An actuarial review of the social insurance fund published in 2002 suggested that the cost of the main pension schemes will rise, by 2056, from a current level of about 1.5% of GNP to 2.1% of GNP, if payments increase in line with prices, or 6.5% GNP, if they are indexed in line with earnings.

However, the implications of the extra costs for the Exchequer will depend on a number of factors, including the level of PRSI contributions being paid in the future, the way in which pension rates grow and the contribution of the National Pensions Reserve Fund towards the extra costs. The latter will not be used until 2025 and the manner in which it is to be disbursed will not be decided until nearer that time. The position will be kept under examination, with the next actuarial review being due for completion in 2007.