John Curran (Dublin Mid West, Fianna Fail)
Link to this: Individually | In context

Question 157: To ask the Minister for Social and Family Affairs his plans to allow pensioners to earn extra cash while retaining full pension rights; when this change will be introduced; and if he will make a statement on the matter. [33582/05]

Séamus Brennan (Dublin South, Fianna Fail)
Link to this: Individually | In context

There are three social welfare schemes providing pensions for older people old age contributory pension, retirement pension and old age non-contributory pension. In the case of the first two, these are contributory schemes payable at 66 and 65, respectively. People who receive old age contributory pension can work without restriction while those applying for retirement pension at age 65 must be retired from employment or self employment. Retirement is defined as not having earnings from employment of more than €38 per week or earnings from self-employment of more than €3,174 per annum.

However, given the improvements in life expectancy which have occurred in recent decades and the demographic changes our society will face in the years ahead, it is important that we should encourage and facilitate people who wish to have the choice of extending their working lives to remain active. As part of An Agreed Programme for Government, the Government is committed to removing the requirement to retire at 65 in order to receive a retirement pension.

The old age non-contributory pension is different in nature from the contributory schemes. In common with other social assistance schemes, the old age non-contributory pension features a means test which is intended to ensure that available resources are targeted at those who are most in need.

The means test is continually kept under review and in June this year a change in the assessment of capital was introduced which allows for capital of €20,000 to be disregarded when eligibility for old age pensions is being assessed. This figure is doubled in the case of pensioner couples.

At present, people on non-contributory pensions can only earn up to €7.60 per week without payment of their pension being affected. It is important that we also provide incentives and choices within the non-contributory scheme for older people to remain active in the workforce, if that is their wish.

The very limited disregard which is available on earnings may act as a disincentive to people to continue working and, accordingly, I am at present examining the situation. Possible changes will be considered in a budgetary context, and in the overall context of social policy reforms.