Tuesday, 8 October 2019
Department of Employment Affairs and Social Protection
State Pensions Reform
459. To ask the Minister for Employment Affairs and Social Protection her plans for social welfare payments for persons obliged to retire at 65 years of age as the State pension age increases to 67 years of age and over. [40610/19]
Increasing pension age, to moderate the increase in pension duration, is a means by which pensions can be made sustainable in the context of increasing longevity. In order to provide for sustainable pensions and to facilitate a longer working life, legislation passed in 2011 provides for an increase in the State pension age in three separate stages. In 2014, the State pension age was standardised at 66. This will be increased to 67 in 2021 and 68 in 2028. The Roadmap for Pensions Reform 2018-2023 has stated that future changes in State pension age after 2035 will be decided on research into 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. It is the only feasible solution which does not involve reducing pension rates to pensioners (which would result in poverty among older people), or reducing other significant areas of Government expenditure (such as other payments made by my Department).
In most cases, it is hoped that workers will continue to work up to State pension age, and so the question of claiming a social protection payment would not arise. Where this is not possible and a person loses their employment 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 subject to the person satisfying the general scheme conditions. Social Welfare legislation states that jobseeker payments may be made until the person reaches pensionable age provided they satisfy the necessary contribution conditions.
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 age 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.