Written answers

Tuesday, 20 September 2011

Department of Social Protection

Social Welfare Code

9:00 pm

Photo of John LyonsJohn Lyons (Dublin North West, Labour)
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Question 260: To ask the Minister for Social Protection if she has given any consideration to re-introducing the pre-retirement allowances for over 55s, which was abolished under the Social Welfare Law Reform and Pensions Act 2006; and if her attention has been drawn to the growing number of over 55s who, after years of employment, are struggling to find jobs in the current turbulent labour market. [24798/11]

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Pre-Retirement Allowance (PRETA) is means-tested payment for people in Ireland aged 55 and over who have left the labour force. Persons on PRETA are no longer required to sign-on as they do not need to be available for work. On the 4 July, 2007, PRETA was discontinued for new entrants. The phasing-out of PRETA was consistent with efforts being made to encourage and facilitate people to continue to work up to and beyond pension age. Theses efforts are in being made in the context of the significant challenges facing the Irish pension system. In particular, the task of financing increasing pension spending will fall to a diminishing share of the population. There are currently six workers for every pensioner and this ratio is expected to decrease to less than two to one by 2050. Increasing State pension age is one of the ways in which we can sustain the pensions system and also maintain the value of the State pension at 35% of average earnings. As announced as part of the National Pensions Framework, state pension age will be increased gradually to 68 years. This will begin in 2014 with the standardisation of the state pension age at 66. State pension age will be increased to 67 years in 2021 and to 68 in 2028.

The Department of Social Protection operates a range of employment support measures designed to encourage and support social welfare recipients of working age to reduce their dependency on welfare payments. While the primary responsibility for job creation rests with the Department of Enterprise Trade and Innovation, this Department already has a role in supporting people from welfare to work. The National Employment Action Plan process is a key element in addressing the progression needs of those on the Live Register. It provides a stimulus to job search and affords an opportunity to explore, under professional guidance, the full range of employment and training services.

While it is acknowledged that the decision to phase out PRETA was taken at a time when labour market conditions were significantly different to that of today. Any re-introduction of the scheme, or a similar benefit type payment, would be inconsistent with the interaction of current working age/pensions policy. Significant costs would also arise.

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