Thomas Pringle (Donegal South West, Independent)
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60. To ask the Minister for Social Protection if her attention has been drawn to Social Justice Ireland's proposal for a universal pension whereby every person over the age of 65 years would have a pension of €230.30 per week; and if she will make a statement on the matter. [43406/13]

Joan Burton (Dublin West, Labour)
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The Report from Social Justice Ireland titled “A Universal Pension for Ireland” recommends a move to a universal based pension system based on residency which would replace the State pension contributory and non-contributory, widow’s, widower’s or surviving civil partner’s (contributory) pension, qualified adult allowance and which would be financed by reducing private pension tax reliefs. The sustainability of the pension system is a particular concern because of the demographic challenges Ireland faces, the associated increases in pension (and other age related) costs, and the deterioration in the public finances. This means that, in the future, the task of financing increased pension spending will fall to a diminishing share of the working population as demographic projections indicate the ratio of working age to older people will decrease from 5.3 to 1 at present to 2.1 to 1 by 2060. Life expectancy in Ireland is also increasing and whilst this is very welcome development, it also presents very real and obvious public policy challenges. A number of policy reviews on pensions have been published in recent years. The Green Paper on Pensions was published in 2007, followed by a country-wide consultation on the future of pensions. The National Pensions Framework (2010) proposed a framework for the future development of pensions. In 2011 and 2012, a number of pension reforms were introduced, State pension age has been increased and changes to eligibility have been introduced which link employment more closely to the rate of pension paid.

In April 2013, the OECD in their Review of the Irish Pension System undertook an independent and objective review of pension policy and endorsed the approach of policy to date. However, it also concludes that financial sustainability issues and our changing demographics and aging population mean that further reform is required.

The report recommends for consideration a range of changes in the key parameters of the Irish State, occupational and private pension schemes and outlines options for more profound structural reforms of the retirement income system. The OECD Report recommended expanding private pension coverage by the introduction in the future of a compulsory or soft compulsory private pension. In the context of the introduction of such an option, it also proposed structural reform of the State pension, including the option of a universal based payment, based on the principle of residency. However, residency based criteria can pose particular difficulties since Ireland does not maintain details of long term residency status. Detailed analysis of these options is on-going in my Department and consideration of the recommendations of this review will inform further developments in the area of pension policy.

The State pension has been successful in lifting older people out of poverty. Compared to the rest of the population, older people in Ireland have the lowest poverty rates (at 1.9%) and are least likely to be at risk of poverty (pointing to the adequacy of the State pension).

Secure and adequate finances are one of the fundamental components of a happy and active retirement. The overall objective of the pension system in Ireland is to provide an adequate and sustainable basic standard of living through direct supports in the form of the State pension and to encourage people (through tax reliefs) to make supplementary pension provision so that they may have an adequate income replacement rates when they retire from work.