Written answers

Tuesday, 3 November 2015

Department of Social Protection

State Pensions Reform

Photo of Brendan GriffinBrendan Griffin (Kerry South, Fine Gael)
Link to this: Individually | In context | Oireachtas source

252. To ask the Tánaiste and Minister for Social Protection for details of reform measures in respect of the State pension introduced since 2011; and if she will make a statement on the matter. [38149/15]

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
Link to this: Individually | In context | Oireachtas source

The State pension is a very valuable benefit and is the bedrock of the Irish pension system. Therefore, it is important to ensure that those qualifying have made a sustained contribution to the Social Insurance Fund over their working lives. State pensions account for the single largest block of social welfare expenditure, and while expenditure on pensions is increasing because of demographic pressures, this is being successfully managed within the overall welfare budget.

This year (2015), the Department will spend an estimated €6.675 billion on pensions – 34.4% of all welfare expenditure and an increase of €168 million over 2014. The overall concern of the Government in recent budgets has been to protect the primary weekly social welfare rates where possible. Maintaining the rate of the State pension and other core payments is critical in protecting people from poverty.

A number of changes have been made to the State Pension Contributory in the past five years

in the context of State pension reform and to provide for sustainable pensions. The main changes are as follows:

1. The Social Welfare and Pensions Act 2011 provided for the necessary amendments to increase the State pension age in line with the National Pensions Framework as set out in the EU/IMF Programme of Financial Support for Ireland. It provided for an increase in the age for qualification for the State Pension from 66 years to 67 years from 2021, and a further increase to 68 years from 2028. It also discontinued the State Pension (Transition) for new claimants with effect from 1 January 2014.

2. The number of paid contributions required to qualify for a State Pension increased from 260 paid contributions to 520 paid contributions with effect from 6 April 2012, as provided for in the Social Welfare Act 1997.

3. From September 2012, new rate bands for State Pension were introduced. These additional payment rate bands more accurately reflect the social insurance history of a person and ensure that those who contribute more during a working life benefit more in retirement than those with lesser contributions.

4. From April 2012 the period for which a claim for State Pension can be backdated is six months as provided for under the Social Welfare Act 2011.

Budget 2016 provided for the first increase in the basic rate of the State pension in seven years, by €3 per week. This will increase the personal rate of the non-contributory pension to €222, and that of the contributory pension to €233.30. This is a 1.3% increase over 2015 rates, and slightly ahead of the projected annual inflation rate of 1% for 2016. There will also be proportional increases in the rates paid for Qualified Adults. This will amount to up to €2.70 per week for such dependent adults aged 66 or over. This change will be legislated for through the forthcoming Social Welfare and Pensions Bill 2015.

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.

Comments

No comments

Log in or join to post a public comment.