Written answers

Wednesday, 2 February 2022

Department of Employment Affairs and Social Protection

Social Welfare Payments

Photo of Aindrias MoynihanAindrias Moynihan (Cork North West, Fianna Fail)
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101. To ask the Minister for Employment Affairs and Social Protection if she has examined the possibility of index linking social welfare payments; and if she will make a statement on the matter. [5425/22]

Photo of Heather HumphreysHeather Humphreys (Cavan-Monaghan, Fine Gael)
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In 2019, my Department undertook a consultation process with a number of interested stakeholders to hear their views on possible approaches to indexation of pensions and social welfare rates more generally.  This process also included discussion with representatives of the community and voluntary sector at the Pre-Budget Forum in July 2019 as well as at bilateral meetings with stakeholders.

The outcome of these discussions was considered, and in consultation with the Department of Public Expenditure and Reform, the Department has developed proposals for setting a formal benchmark for State Pension Contributory payments and the indexation of future changes in pension rates of payment.

The approach developed, known as the “smoothed earnings” approach, aims to ensure that over the long-term, the relative value of welfare payments compared to market earnings would be maintained and that, in the short-term, the real value, or purchasing power, of these payments would be protected.

The Pensions Commission report, which is currently being considered, also examined the issue of benchmarking pension rates and has endorsed the “smoothed earnings” approach.

The Department is currently considering the recommendations of the Pensions Commission and I intend to bring proposals to Government by the end of March 2022 in relation to the recommendations.


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