Aengus Ó Snodaigh (Dublin South Central, Sinn Fein)
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Question 81: To ask the Minister for Social and Family Affairs her views on the fact that while Ireland has one of the highest income levels per head in the world, the social welfare pensions are the lowest in the OECD, leaving nearly 4% of pensioners in consistent poverty and over 20% at risk. [24618/08]

Mary Hanafin (Dún Laoghaire, Fianna Fail)
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As the Deputy will be aware, the needs of older people have been a priority for Government for many years and we have managed to make very significant improvements in social welfare pensions. The rate of contributory pension has increased from just €95 per week in 1996 to more than €223 per week in 2008 and the non-contributory pension has increased from €82 per week in 1996 to €212 per week this year. In the Government Programme we have committed ourselves to a pension rate of €300 per week by 2012.

The overall policy in relation to pensions is to ensure that all residents will have an acceptable replacement income when they retire. The function of the social welfare element is to provide a basic income, while occupational and private pensions supplement this and give people additional resources related to their pre-retirement earnings and savings. Many OECD countries have introduced mandatory State schemes for providing both basic income and earnings-related pensions. OECD surveys tend to focus in the main on the level of payments made to pensioners from these mandatory schemes. Because of the way in which our pensions system is organised, such surveys can provide a distorted picture of the economic position of our older people. They make no allowance for important factors such as:

Income from private pensions;

The fact that the vast majority of older people would be home-owners by the time they retire; or

Additional supports provided by the Government such as the Household Benefits, Medical Cards etc.

Accordingly, while such surveys are useful to compare aspects of the pensions systems across other countries, for the reasons outlined, they are not a true indication of the economic position of our older people.

It is worth noting that the OECD statistics referred to by the Deputy relate to 2004 and do not take account of significant pension increases in recent years. The strong increases in social welfare pensions since 2006 should further improve the replacement rate of Irish state pensions. Finally, the Deputy will also be aware that the consultation process on the Green Paper on Pensions has recently closed and the Government is committed to deciding on a new framework for future pensions policy by the end of the year.