Peter Mathews (Dublin South, Fine Gael)
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375. To ask the Minister for Social Protection her plans in respect of the removal of the transition pension in 2014 (details supplied); and if she will make a statement on the matter. [25332/13]

Joan Burton (Dublin West, Labour)
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The State pension transition (SPT) is paid for a maximum of 12 months and is available to people who are retired from work on reaching age 65 years provided they satisfy the necessary PRSI contributions. In December 2012, there were approximately 14,400 customers in receipt of SPT. The Social Welfare and Pensions Act 2011 provided for changes to State pension age. From 1 January 2014, the abolition of SPT will standardise the age for payment of a State pension to 66 years. In addition, the age at which State pension (contributory) (SPC) will be payable will increase to 67 years from 2021 and to 68 years from 2028.

The existence of the SPT is historical and relates to the qualifying age for SPC which, up until the early 1970s, was 70 years of age. SPT (known then as the Retirement Pension) was introduced at that time to bridge the gap for employees who had to retire at 65. The qualifying age for SPC was subsequently reduced over time to 66 years, which left SPT effective for just one year. The abolition of SPT removes the retirement condition which acts as an incentive for people to leave the workforce and has been widely criticised as a barrier to older people remaining in employment. There is no retirement condition attached to the SPC.

The sustainability of pensions in the future requires longer working. The OECD report states in its recent Review of the Irish Pensions System states that the immediate concern for Ireland is to increase effective retirement age by encouraging longer working. This applies to those who wish to work past pension age but also, (as evidenced by the figures produced below) to those who exit the workforce early prior to reaching pension age.

With regard to the impact of the abolition of SPT in 2014, the award figures for SPT over a number of years have been analysed. The numbers impacted demonstrate that many people leave the workforce some years before pension age, more so than might have been perceived. In addition, low numbers of people in employment are impacted by the abolition of SPT. A person who retires from work on reaching age 65 may apply for another social welfare payment, depending on their individual circumstances. In relation to job seekers, there are already a number of special transitioning provisions applying in the case of people who are aged between 65 and 66. Existing legislation provides that, subject to the person having paid 156 or more qualifying contributions and satisfying the general scheme conditions, a person whose job seekers benefit expires in their 65th year will continue to be paid benefit up until the age of 66. On this basis, workers who suffer a substantial loss of employment at age 65 will not be subject to the reductions in duration.

In February 2012, my Department held meetings with the representative groups for older people to outline the changes to SPT and SPC. Feedback was sought from these groups and included in an information pack that was prepared to further publicise the changes to the scheme. The finalised information pack was published in early March 2012 on the Department’s website, www.welfare.ie and the link sent on twitter. It was also made available through the Citizens Information Board website www.citizensinformation.ie. It was widely circulated to customer representative groups including those representing older people, working age groups, farming groups, trade unions, employer groups, accountancy bodies etc. It was also forwarded to all members of the Oireachtas.

Presentations on the introduction of these changes were also made at the Department’s regular briefings with customer representative groups and to members of the public over the course of the year. A further information campaign is planned to take place shortly to continue to raise awareness of the changes.