Gerald Nash (Louth, Labour)
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805. To ask the Minister for Employment Affairs and Social Protection the status of plans to provide a top-up pension payment for those post-retirement age that are without a full social insurance record; if existing pensioners will be able to retrospectively avail of the proposed payment; and if she will make a statement on the matter. [12854/20]

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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Further to clarification received by the Deputy’s office, it appears that this query is in relation to a proposal mentioned in the draft Programme for Government.  The proposals in the draft Programme for Government will need to be more formally defined before it is possible to comment on the detail of the proposals.

There is currently no provision for paying a top-up pension.  The introduction of a such a payment and any related changes to the PRSI system would have to be considered in the overall policy and budgetary contexts.  Any future policy decisions related to the state pension system will obviously reflect the policy priorities of the incoming Government.

The Total Contributions Approach (TCA), when it is introduced, is intended to be a fairer and more transparent system where the person’s lifetime contribution will be more closely reflected in the benefit received.  Having carefully examined the outputs of the TCA consultation process, officials in the Department are designing the scheme, with a view to including significant recognition for home caring periods in the new model.  The final design of the model will need to be brought to Government for its consideration and approval.

The State Pension (Contributory) is a PRSI-based pension, financed by contributions made by current workers and their employers, and paid to pensioners, at a rate based upon their PRSI record when working.  Those with few or no PRSI contributions paid over the years may alternatively qualify for the State Pension (Non-Contributory), which is a means-tested pension, financed by the Exchequer, and paid at up to 95% the maximum rate of the State Pension (Contributory).  There are also significant disregards in the household means test for the State Pension (Non-Contributory).  Alternatively, if their spouse has a contributory pension, they may qualify for an increase for a Qualified Adult (based on their own means), amounting up to 90% of a full rate State Pension (Contributory).  The most advantageous payment for a pensioner will depend upon their individual circumstances. 

Furthermore, it should be noted that there is no statutory retirement age in Ireland and the age at which employees retire is determined by the employment contract between the employer and the employee.  Many such contracts may have been entered into in the context of previous state pension arrangements.  However, a mandatory retirement age did not apply.  Employers are legally entitled to increase the duration of the employee's employment for either one or two years, depending on when he or she plans to retire, if both parties agree.  The Workplace Relations Commission has produced a code of practice on longer working, and The Irish Human Rights and Equality Commission has also published guidance material for employees and employers who use fixed-term contracts beyond what was the normal retirement age of 65 years.  Statistical data on long-term demographic changes indicate that people are living longer and healthier lives.  Many of them may want to continue working after 65 and these resources can facilitate them in their choice.

I hope this clarifies the matter for the Deputy.