Thursday, 3 June 2021
Department of Employment Affairs and Social Protection
307. To ask the Minister for Employment Affairs and Social Protection the full savings to the State of changes to the contributory and non-contributory pension entitlements, for example, as a result of changes in bands for contributory pensions, the ending of the transition pension and other changes which resulted in State savings in each year since 2009, in tabular form. [30329/21]
In order to provide for sustainable pensions and to facilitate a longer working life, successive Governments have considered the sustainability challenges faced by the Pensions system. Population projections indicate that Ireland will undergo significant demographic changes between 2020 and 2050. The number of State pension recipients will continue to rise. The pensioner support ratio will decline from 4.9 workers for every individual over age 66 to 2.9 in 2035 to 2.0 by 2055. Sustainability is vital if the current workers, who fund State pension payments through their PRSI contributions, are to receive a pension themselves when they reach retirement age.
Expenditure on State Pensions is both multi-faceted and inter-related - driven by a combination of primary rates, allowances values, entitlement rules, recipient numbers and claim duration, amongst other things.
In the period referenced in the question (post 2009), there have been a number of reform and policy measures including changes to the State Pension rate bands (2012), closing off of the State Pension Transition (2014), introduction of the Interim Total Contributions Approach (2018), increases in the basic rate of State Pension occurred 4 times (in 2016, 2017, 2018 and 2019), and recipient numbers have been increasing continuously over the period.
Due to the interaction between policy measures, rate changes and demographics over the period, it is not possible to disaggregate the impact of the various changes.
Tables reflecting both expenditure and recipient numbers on State Pension Contributory and State Pension Non-Contributory have been set out below. As can be seen from the tables, there are more than 163,000 additional pension recipients between 2009 and 2019, across both schemes.
Annual expenditure on the two schemes is now over €6.6Bn - representing an increase of over €2.2Bn in 10 years. In percentage terms, 2019 expenditure is 152% of what it was in 2009.
As the Deputy will be aware, a Commission on Pensions has been established to examine a range of issues including sustainability, age, eligibility, contributions and calculation methods. Once it has concluded its deliberations, the Commission will report to Government by June of 2021. The Government will respond on its report within 6 months.
I hope this clarifies the matter for the Deputy.
Table 1 - State Pension (Contributory) Recipients and Expenditure 2009 - 2019
Table 2 - State Pension (Non-Contributory) Recipients and Expenditure 2009 - 2019