Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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135. To ask the Minister for Employment Affairs and Social Protection the estimated full year cost of ensuring the State contributory and non-contributory pensions are available to all those that reach 65 years of age. [25689/20]

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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Reducing the State Pension Age to 65 years would increase pension related expenditure significantly. My Department’s best current estimate of changing the pension age to 65 with effect from 1/1/2021 is that it would cost €450 million extra in the first year, €845 million extra in the second year, rising to over €1 billion extra in 2025, and this extra cost would continue to rise every year thereafter. The accumulated cost differential for the period 2021-2025 would be over €4.25 billion, i.e., it would cost c.€4.25 billion more than the existing system.

The estimates are for net costs and take into consideration additional increases or reductions arising in PRSI receipts, movements from other social welfare schemes, and secondary benefit entitlements including Free Travel, Fuel Allowance, Household Benefit Payment and Telephone Allowance. The estimates are based on current rates of payments and do not make any provision for rate increases. It should be noted that these costings are subject to change in the context of emerging trends and associated revisions of the estimated numbers of recipients.

Through its Programme for Government “Our Shared Future”, the Government has already committed to defer the planned increase in the State Pension Age next year keeping it at 66 years of age, and to introduce a Retirement Payment for those who retire at age 65 at the same rate as Jobseeker's Benefit without a requirement to sign on, partake in any activation measures or be available for and genuinely seeking work. Subject to Government approval, I intend to bring the necessary legislation for these initiatives before the Oireachtas later this year.

The Deputy is aware that the public policy and social issues in relation to funding a sustainable and adequate State pension system are complex. That is why the Programme for Government also commits to the establishment of a Commission on Pensions to examine a range of issues including contributions, calculation methods, sustainability, eligibility and intergenerational fairness. The Terms of Reference for the Commission on Pensions are currently being developed and options for its membership are being considered. I will bring proposals in that regard to Government as soon as possible. Once it has concluded its deliberations, the Commission will report to Government by June of next year.

I hope this clarifies the matter for the Deputy.