Duncan Smith (Dublin Fingal, Labour)
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1125. To ask the Minister for Employment Affairs and Social Protection if her attention has been drawn to a pre-pension scheme in other European Union countries in which employees working with hazardous material can avail of 85% of their State pension from the age of 58 years onwards with the remaining 15% paid at retirement age; if she is considering any such scheme; and if she will make a statement on the matter. [30007/22]

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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The Pensions Commission was established in November 2020 to examine the sustainability of the State Pension system and the Social Insurance Fund, in fulfilment of a Programme for Government commitment.  The terms of reference included a review of the situation in other countries, the changes they have planned or legislated for and the approaches taken.  The Commission was an independent body comprised of knowledgeable and experienced academics, pension experts, members of civil society and representatives of workers and employers.  Once it completed its work and fulfilled its obligations, the Commission was dissolved.  

The Commission's Report was published on 7th October 2021 and it contains almost 250 pages of analysis, consideration and recommendations.  It is a comprehensive report that takes account of an assessment of various analyses of population, labour force and expenditure projections; an examination of international approaches; and responses to an extensive consultation process.  The report includes assessments of the State Pension age (Chapter 11), Flexible Access (Chapter 12), Arduous Jobs (Section 11.8.1) and Recognition of Arduous and/or Hazardous Jobs in Europe (Appendix 11A).  The Commission’s Report, Technical Sub-Committee's working papers and submissions made to the Pensions Commission are available on the website, pensionscommission.gov.ie.   

The Commission’s analysis indicates that:

- In general, the international trend is moving away from providing specific pension provision and instead using other provisions available within the system to support those in arduous employment

- There is no single definition of what constitutes “arduous and/or hazardous work”.

- The operation of pension policies for workers in arduous or hazardous jobs is complex and varies widely between European countries.

- While Ireland is atypical in not having some element of flexibility in its State Pension system, care needs to be taken in comparing State Pension systems internationally. Disparities in preferences for flexibility across countries are likely driven by the design of pension systems in each country. 

- Ireland has a flat rate, rather than earnings related, State Pension payment system.  While it makes the State Pension system effective at redistribution and reducing pensioner poverty, it can also limit the extent to which flexibility can be introduced into the system.

- The gender and equality impacts of this issue are difficult to quantify.

- As the labour market evolves, increasingly people are moving between employments more fluidly.  Individuals who wish to continue working but can no longer work in their current job should be facilitated in moving to another area of employment.

- There are alternative social welfare payments in Ireland for those who are unable to work past 65 years of age, including the Benefit Payment for 65Year Olds, Invalidity Pension and Illness Benefit.

Successive Governments have committed to supporting older peoples’ continued engagement in economic and social life, including in the National Positive Ageing Strategy (2013), the Report of the Interdepartmental Working Group on Fuller Working Lives (2016) and the Roadmap for Pensions Reform 2018 – 2023 (2018).  Building on the work of these previous groups and reports, the Pensions Commission supported measures to facilitate and encourage fuller working lives. 

The Pensions Commission’s Report established that the current State Pension system is not sustainable into the future and it set out a wide range of recommendations in this regard, including flexible access to the State Pension.

In the interests both of older people and future generations of older people, the Government is considering the comprehensive and far reaching recommendations in the Pensions Commission’s Report very carefully and holistically.  My officials are examining each of the recommendations and consulting across Government through the Cabinet Committee system.  The views of the Joint Committee on Social Protection, Community and Rural Development and the Islands and the Commission on Taxation and Welfare are being considered as part of these deliberations.  I intend bringing a recommended response and implementation plan to Government for its consideration in the coming weeks.  

It is clear from the Commission’s work that State Pension reform is necessary and it is complex.  It would be a strategic risk not to plan and provide for projected demographic changes, not least in terms of income adequacy for older people.  The State Pension is the bedrock of the pension system in Ireland.  It is extremely effective at ensuring that our pensioners do not experience poverty.  This Government is committed to ensuring that this remains the case for current pensioners, those nearing State Pension age and today’s young workers including those who are only starting their careers.

I hope this clarifies the matter for the Deputy.