Rose Conway-Walsh (Mayo, Sinn Fein)
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97. To ask the Minister for Employment Affairs and Social Protection the first- and full-year cost of reducing the retirement age to 65 and increased cost out to 2029 or for each year projections are available; and if she will make a statement on the matter. [25804/24]

Heather Humphreys (Cavan-Monaghan, Fine Gael)
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It is important to note that the State Pension age was never 65 years of age. The State Pension (Contributory) and State Pension (Non-Contributory) were never paid at 65 years of age.

Reducing the State Pension age to 65 years would increase pension related expenditure significantly. My Department does not have a detailed actuarial analysis of this option and therefore it is not possible to provide an accurate projection of the cost of the measure suggested by the Deputy. However, a high-level estimate of the cost of introducing State Pension payments at the age of 65 based on current State Pension (Contributory) and State Pension (Non-Contributory) rates of payment (€277.3 and €266 respectively) from 01/01/2025 is an additional €415million for one year only. It is estimated that the yearly costs of the measure will rise to approximately €500 million extra by 2030. However, it is important to note that this figure is based on current 2024 rates of payment, and would obviously be considerably higher if there are any increases in the rates of payment between now and then.

These high-level estimates are based on net costs for future State Pension (Contributory) and State Pension (Non-Contributory) qualifiers but does not include estimates for any changes to household benefits, free travel or fuel allowance costs. In addition, the figure takes no account of any additional costs to public sector pensions.

The "Benefit Payment for 65 year olds" was introduced in line with the Programme for Government commitment, to provide a benefit payment for people who are aged 65 and who are required to retire, or who chose to retire, without a requirement to sign on, engage in activation measures or be available for, and genuinely seeking work. This payment was designed specifically to bridge the gap for people who retire from employment or self-employment at 65 years of age but who do not qualify for the State Pension until age 66.

Following on from the recommendations of the Pensions Commission, the Department of Enterprise, Trade and Employment is introducing measures that allow, but do not compel, an employee to stay in employment until the State Pension age.

Demographic projections indicate significant increases in the number of future State Pension recipients which will impact on State Pension related expenditure. Clearly, reducing the State Pension age to 65 years of age would be very expensive and would require either considerable additional revenues, or, if introduced on a cost-neutral basis, very significant diversion of funds from elsewhere.

I trust this clarifies the matter for the Deputy.