Written answers

Wednesday, 16 October 2013

Department of Social Protection

Pensions Reform

Photo of Jim DalyJim Daly (Cork South West, Fine Gael)
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43. To ask the Minister for Social Protection if employers will be obliged to offer employees extended employment contracts up to their sixty-sixth birthday when the transition pension is discontinued next year; and if she will make a statement on the matter. [43722/13]

Photo of Jim DalyJim Daly (Cork South West, Fine Gael)
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44. To ask the Minister for Social Protection the options available to persons who are forced to retire from employment on the 65th birthday but will not receive a pension until their 66th birthday when the transition pension is discontinued next year; and if she will make a statement on the matter. [43723/13]

Photo of Joan BurtonJoan Burton (Minister, Department of Social Protection; Dublin West, Labour)
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I propose to take Questions Nos. 43 and 44 together.

There is no statutory compulsory retirement age for employees in Ireland. In relation to the employment relationship, responsibility for setting retirement age is a matter for the employer/employee relationship and the contract of employment. The Court of Justice of the European Union (CJEU) has made rulings in a series of age-discrimination cases concerning Directive 2000/78/EC, which prohibit work-related discrimination on various grounds, including age. The CJEU has clarified that mandatory retirement ages may be set down by employers within the context of national law, whether by contract, custom and practice or other means, which must be objectively and reasonably justified by a legitimate social policy aim, with the means of achieving that aim being both appropriate and necessary. Enterprise policy and equality issues come within the respective remit of my colleagues, the Minster for Jobs Enterprise and Innovation and the Minister for Justice and Equality.

It is also recognised that the range of policy areas which influence working and retirement decisions fall within the remit of a range of departments and requires a co-ordinated responses if labour market participation rates and effective retirement ages of older workers are to improve. In this regard, an Interdepartmental Working and Retirement Group is currently considering cross departmental policy issues that may support longer working and thereby improve the sustainability and adequacy of pensions systems. This Group is considering the broad range of issues impacting on the labour market participation of older workers and will prepare preliminary proposals detailing measures which may encourage participation and retention in the labour market of older workers.

In terms of State pension reform measures, increasing State pension age and the abolition of the State pension (transition) are steps that have been taken to ensure the sustainability of pensions into the future. The decision to reform State pension was taken in the context of changing demographics and the fact that people are living longer and healthier lives.

It should be noted that until the 1970s, the standard age for receipt of State pension was 70 years of age. This applied at a time when longevity was much lower and working patterns were more likely to be physically demanding. State pension (transition) was introduced in 1970 when it was known as the retirement pension and was designed to bridge the gap between the standard social welfare pension age, which at that time was 70 years of age, and retirement age. Overtime, the age for State pension contributory was reduced to 66 years.

In terms of social welfare supports available to those at age 65, all short term schemes are payable up to age 66. The main social welfare payment available to those who leave employment before State pension age is jobseeker’s benefit. Persons who qualify for a jobseeker’s benefit who are aged between 65 and 66 years are generally entitled to receive payment up to the date on which they reach pensionable age (66 years). Where a person does not meet the qualifying conditions for insurance based schemes, assistance schemes may be available to them provided they meet the qualifying conditions for these schemes. Further consideration is being given to the position of those exiting the workforce before pension age.

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