Written answers

Thursday, 8 December 2016

Department of Social Protection

Pre-Retirement Allowance

Photo of Clare DalyClare Daly (Dublin Fingal, Independent)
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115. To ask the Minister for Social Protection his plans to restore the pre-retirement over 55s allowance; and if he will make a statement on the matter. [39166/16]

Photo of Leo VaradkarLeo Varadkar (Dublin West, Fine Gael)
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Since the 4th July 2007, Pre-Retirement Allowance was abolished for new customers. However, customers who were already in receipt of Pre-Retirement Allowance on that date continue to receive payment as long as they satisfied the conditions for payment.

The overall concern in recent years has been to protect the value of weekly social welfare rates. Expenditure on pensions, at approximately €7 billion, is the largest block of expenditure in my Department in the Estimate for 2016, representing approximately 35% of overall expenditure. Due to demographic changes, my Department’s spending on older people is increasing year on year. Maintaining the rate of the State pension and other payments is critical in protecting people from poverty.

Each year more people are reaching pension age and living longer in retirement. As a result of this demographic change, the number of State pension recipients is increasing by approximately 17,000 annually. This has significant implications for the future costs of State pension provision, which are currently increasing by close to €1 billion every 5 years. The purpose of changes to the State pension age is to make the pension system more sustainable in the context of increasing life expectancy.

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. State pension age is being increased in three separate stages. In 2014, the State pension age was standardised at 66 by the abolition of the State pension (transition). The pension age will be increased to 67 in 2021 and 68 in 2028. It is anticipated that this rate of increase in pension age will be no faster than the rate of increased longevity. It is also anticipated that the duration of a typical State pension may continue to increase, albeit at a slower pace than if these increases in pension age were not provided for.

Where individuals are out of employment prior to pension age they often seek the support of either the jobseeker’s benefit or jobseeker’s allowance schemes. Legislation provides that a person must satisfy the conditions of being available for and genuinely seeking work in order to be entitled to jobseeker’s benefit or jobseeker’s allowance. Any person who fails to satisfy these conditions is not entitled to a jobseeker’s payment.

People in receipt of a jobseeker's payment must engage with the Department's activation measures and can face sanctions if they fail to do so. However, since January 2014, these criteria have been eased for people aged 62 and over. They are able to avail voluntarily of an array of supports from the Department if they wish to return to work, training or education but sanctions are not applied to this cohort, should they decide they do not wish to engage with the activation process.

Currently individuals who claim jobseeker’s benefit in their 65th year continue to be eligible for that payment until reaching pension age. While this is currently up to their 66th birthday, this approach will continue to extend their jobseeker’s payment continuing for another year when the pension age rises to 67, and indeed a further year when it rises to 68 in 2028. This eligibility is of course still subject to satisfying conditions such as the ‘genuinely seeking work’ condition.

Special arrangements have also been made so that this cohort of jobseekers register with their local office once a year and their payments can be paid directly into their bank accounts.

In light of these existing provisions there are no plans to reintroduce the Pre-Retirement Allowance scheme for new entrants.

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