Mattie McGrath (Tipperary South, Independent)
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108. To ask the Minister for Social Protection the rationale behind recent changes to the qualifying age for old age pensions; if she will outline further changes her Department is planning over the lifetime of the Government; and if she will make a statement on the matter. [20670/14]

Joan Burton (Dublin West, Labour)
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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. These decisions were taken in the context of changing demographics and the fact that people are living longer and healthier lives:

- There are currently 5.3 people of working age for every pensioner and this ratio is expected to decrease to approximately 2.1 to 1 by 2060;

- The over 65 year old population is also projected to increase from 11% of the total population in 2010 to 15% in 2020 and to 24% in 2060;

- Life expectancy is increasing. In the mid-1990s, life expectancy for males was 73 and for females, 78.5. For those aged 65 today life expectancy for males is 82 years for men and 85 for women, by 2030 this will have risen to 84.1 and 87.4 respectively.

These changes are currently taking place. There are approximately 17,000 additional pensioners coming into receipt of State pension each year:

- In 2013, the overall Departmental expenditure figure was €20.2 billion and expenditure on pensions accounted for 32% of this;

- In the absence of reform, it is estimated that State expenditure on pensions (including public sector occupational pensions) will increase from approximately 7.5% of GDP in 2010 to 11.7 % in 2060.

The increases in State pension age were provided for in the Social Welfare and Pensions Act, 2011. This provided that State pension age will be increased gradually to 68 years. In January 2014, State pension age was standardised at age 66 with the cessation of State pension transition. The State pension age will increase to 67 years in 2021 and to 68 years in 2028.

With regard to the abolition of State pension transition in 2014, 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. Over time, the age for State pension contributory was reduced to 66 years.

The Deputy may wish to note that the majority of people who went into receipt of the State pension (transition) did not come from work, as most were already on other social welfare schemes. In December 2012 there were approximately 14,400 State pension (transition) claims in payment and of those, just 12.5 per cent came from work. Over 50 per cent came from other social welfare schemes such as illness benefit, jobseekers benefit and assistance, invalidity and carers, indicating that significant numbers of people are leaving the workforce for a variety of reasons well in advance of State pension age.

Finally social welfare supports will continue to be available to those who need it most and where a person fails to meet the qualifying conditions of an insurance based scheme, a means tested assistance payment may be available provided they satisfy the qualifying conditions. All short term social welfare schemes are payable to age 66.

The main social welfare payment available to those who leave employment before 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). In addition, with effect from 1 January 2014, fully unemployed job seekers aged 62 or over have been placed on yearly signing and given the option of transferring to EFT payments. They are not subject to mandatory activation measures but may avail of employment supports which will continue to be available to them and they will not be subject to mandatory activation related sanctions.

The OECD Review of the Irish Pensions System in 2013, which I commissioned, stated that: “Ireland is ahead of the curve in setting higher retirement ages for the future and many hard decisions have already been made compared to most other OECD countries in this respect”. The OECD also stated that the scheduled increases in pension age are enough to compensate for the projected increases in life expectancy. I have no plans to introduce any further changes to the qualifying age for the State pension age.