Róisín Shortall (Dublin North West, Social Democrats)
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511. To ask the Minister for Employment Affairs and Social Protection her views on increasing the age at which a person will become eligible to claim a State pension; and if she will make a statement on the matter. [40425/17]

Regina Doherty (Meath East, Fine Gael)
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The Social Welfare and Pensions Act 2011 provided that State pension age will be increased gradually to 68 years. This began in January 2014 with the abolition of the State pension (transition) available from 65 for those who satisfied the qualifying conditions, thereby standardising State pension age for all at 66 years, which is the current State pension age. This will increase to 67 in 2021 and to 68 in 2028.

No further increases are planned at this time. Any need for future increases will depend on a range of factors such as increases in life expectancy, the ratio of working age people to pensioners, employment rates among older workers, pension rates, the prevailing economic environment and the availability of measures and policies to support older workers. Given the timescales involved and the unpredictability of social and economic change in the coming decades, I believe it would be inappropriate for such decisions to be made at this point.

In most cases, it is hoped that workers will continue to work up to the new State pension age. Where this is not possible, and where a person is available for work, there are specific measures which apply to someone claiming Jobseeker’s Benefit from a date after their 65th birthday. Where qualified, these recipients may continue to be eligible for that payment until reaching pension age.

In 2013, the cost of the State pension (transition) was €137 million. Its abolition was not expected to save that amount of expenditure in full, as some people who were affected would alternatively claim working age payments such as Jobseeker's Benefit (albeit at a lower rate than the rate of the State pension), or may claim an Increase for a Qualified Adult in respect of their spouse’s pension.

However, it is estimated that well over half of that cost has been saved each year as a result of this measure, and this would be expected to increase as (a) the number of 65 year olds increases, (b) the change results in a higher percentage of people working while aged 65, and (c) there have been two Budget increases in the rate of the State pension since then. It is estimated that the net saving in 2018 is likely to be in the region of €84 million, and this is expected to rise to €87 million by 2020. These figures do not include future rate increases.

Reversing this decision would, therefore, significantly increase the annual cost of State pensions, and would reduce the funds available to pay for any future increases in the rates of the payment.

The Deputy should note that there is no statutory retirement age in the State, and the age at which employees retire is a matter for the contract of employment between them and their employers. While such a contract may originally have been entered into with a retirement date of 65, in the context of the previous State pension arrangements, there is no legal impediment to the employer and employee agreeing to increase the duration of employment for one or more years, if both parties wish to do so.

In January 2016, an Interdepartmental Group on Fuller Working Lives, chaired by the Department of Public Expenditure and Reform, was established specifically to examine the implications arising from prevailing retirement ages. The final report of the Group made a number of recommendations to support working and retirement practices. This included a request to the Workplace Relations Commission to prepare a Code of Practice under Section 42 of the Industrial Relations Act, 1990 to help manage the engagement between employers and employees regarding retirement issues and longer working. The final report, the recommendations of which were accepted by Government in August 2016, is available on the Department of Public Expenditure and Reform’s website.

I hope this clarifies the matter for the Deputy.