Mick Barry (Cork North Central, Solidarity)
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515. To ask the Minister for Employment Affairs and Social Protection the estimated net cost in 2018 if the eligible age for the State pension was reduced from 66 to 65 years of age, taking into account the savings that would be made on jobseeker's allowance or benefit. [40513/17]

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), which had been available from 65 for those who satisfied the qualifying conditions, thereby standardising State pension age for all at 66 years. This is the current State pension age. It will increase to 67 in 2021 and to 68 in 2028.

Reversing the abolition of State pension (transition) would have a significant Exchequer cost. 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 the gross 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 has been estimated that the net saving in 2018 is likely to be in the region of €84 million.

However this would not be the total cost of reducing the State pension age. If the age for the State pension (contributory) was reduced to 65 from 66, rather than the reintroduction of State Pension Transition, there would be an additional cost as the State Pension (contributory) does not have the retirement criterion that the State Pension Transition did. There would, therefore, be an additional cost to the Social Insurance Fund, paid in respect of people who would still work while aged 65, in addition to receiving the State Pension (contributory), payments which did not arise under the State pension (transition). It is unclear what that additional cost would amount to, but it would mean that the cost would be significantly higher than the €84 million estimated for re-introduction of the State pension (transition).

I hope this clarifies the matter for the Deputy.