asked the Minister for Social Welfare if he will review the operation of the retirement pension scheme of his Department as it operated when the retirement age was 70 years and the age for retirement pension was 65; if, on the basis of this review, he will give an estimate of the number of people likely to apply for retirement pension if the age was dropped from 65 to 60 years; and the resultant cost to the Exchequer.
Written Answers. - Retirement Pension Scheme.
492.
The qualifying age for retirement pension was fixed at 65 when the scheme was introduced in 1970 as that age had become the norm for retirement from most employments. The qualifying age for old age pensions remained at 70 years until 1973 and was progressively reduced to its present level of 66 years over the period to 1977. A retirement age of 65 years is still standard in many occupational pension schemes.
The issue of retirement age, including its reduction or the introduction of flexibility, will be dealt with in the framework for a national pension plan which the Government intends to publish later this year. The Commission on Social Welfare may also make some recommendations in this area.
While it is difficult to estimate the additional take-up, particularly in the light of the current practice in occupational pension schemes, an extra 17,000 people might claim a retirement pension from the Department of Social Welfare if the qualifying age was reduced from 65 to 60 years. Taking account of the effects on tax and PRSI income as well as the direct expenditure effects, the net additional cost is estimated at about £59 million in a full year. Unless part of that cost were met by an increase in the PRSI rate the entire cost would fall on the Exchequer.