Willie O'Dea (Limerick City, Fianna Fail)
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619. To ask the Minister for Employment Affairs and Social Protection her plans to address the situation of those that are forced to retire at 65 years of age but cannot now receive their entitlement to a State pension until aged 67; and if she will make a statement on the matter. [5282/19]

Regina Doherty (Meath East, Fine Gael)
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It is well known that people are living for much longer. This is very positive. As a result of this demographic change, the number of State pension recipients is increasing year on year. This has significant implications for the future costs of State pension provision which are currently increasing by approximately €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. This sustainability is vital, if the current workers, who fund State pension payments through their PRSI, are to receive a pension themselves when they reach retirement age. Therefore, 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 was available to people aged 65 who satisfied the qualifying conditions. This measure standardised the State pension age for all at 66 years. This will increase to 67 in 2021 and to 68 in 2028.

In most cases, it is hoped that workers will continue to work up to State pension age. Where this is not possible and a person exits the workforce before reaching State pension age they may apply for either the jobseeker’s benefit or jobseeker’s allowance schemes. Jobseeker’s payments are currently paid to eligible jobseekers aged 18 to 66 years.

Jobseekers Benefit is payable subject to the person satisfying the general scheme conditions. This entitlement is normally paid for 9 months (234 days) for people with 260 or more PRSI contributions paid and for 6 months (156 days) for people with fewer than 260 PRSI contributions paid. Arrangements are in place to provide that jobseekers whose benefit expires in their 65th year can generally continue to be paid benefit up until pensionable age (66 years) provided they satisfy the necessary contribution conditions. The jobseekers schemes are kept under review and any further changes, including entitlement beyond the 66th year, will be considered in that context.

It is important to note that there is no legally mandated 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 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 this regard, the Workplace Relations Commission has produced a Code of Practice on Longer Working and the Irish Human Rights and Equality Commission (IHREC) has published guidance material for employers on the use of fixed-term contracts beyond normal retirement age.

I hope this clarifies the matter for the Deputy.

Éamon Ó Cuív (Galway West, Fianna Fail)
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620. To ask the Minister for Employment Affairs and Social Protection if a person who reached State pension age before 2012 can avail of the new home care credits and TCA if it would be more beneficial to them; and if she will make a statement on the matter. [5284/19]

Regina Doherty (Meath East, Fine Gael)
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In January last year I announced a new Total Contributions Approach (TCA) to calculating the entitlement of pensioners who reached state pension age from September 2012 (i.e., those born on or after 1 September 1946). This approach is expected to significantly benefit many people, particularly women, whose work history includes an extended period of time outside the paid workplace, while raising families or in a caring role. The TCA will ensure that the totality of a person’s social insurance contributions - as opposed to the timing of them - determines their final pension outcome. The HomeCaring Periods can be claimed for any year in which they occurred - they are not limited to years since 1994.

People whose pensions were decided under the 2000-2012 ratebands were subject to a significantly more generous regime than those who qualified before or afterwards, as a Yearly Average of only 20 contributions per year (out of a maximum of 49) could attract a 98% pension. The effect of those changes, as it impacted upon those new pensioners since 2012, will be familiar to anyone who followed the debate on this matter over the last 6 years. If pre-2012 pensioners were also allowed avail of HomeCaring Credits, their arrangements, as a group, would continue to be significantly more generous than those of post-2012 pensioners. There would also be a very significant cost which would be expected to be of the order of several hundred millions of euros each year. This in turn could significantly impact funds for future pension increases with consequential implications for pensioner poverty.

For those with insufficient contributions to meet the requirements for a State pension (contributory), they may qualify for a means tested State pension (non-contributory), the maximum personal rate for which is €232 (over 95% of the maximum rate of the contributory pension). This rate of payment does not include rent allowance, household benefits or fuel allowance. Alternatively, if their spouse is a State pensioner and they have significant household means, their most beneficial payment may be an Increase for a Qualified Adult, based on their personal means, and amounting up to 90% of a full contributory pension.

I hope this clarifies the matter for the Deputy.