Vol. 421 No. 1
11 Mr. Deenihan asked the Minister for Social Welfare if he will allow individuals who have worked in the private sector for more than 40 years and who have fully paid up contributions the option to retire on full contributory pension; and if he will make a statement on the matter.
27 Mr. Deenihan asked the Minister for Social Welfare if he will allow individuals who have worked for 40 years or over in full-time insurable employment to retire with full benefits; and if he will make a statement on the matter.
I propose to take Questions Nos. 11 and 27 together.
To qualify for a retirement pension a person must have entered insurance at least ten years before reaching pension age, have at least 156 contributions paid and have a yearly average of at least 24 contributions registered since January 1953 when the unified system of social insurance came into effect or the time they started insurable employment if later.
Generally a person who had 40 full years contributions would be likely to qualify for a full contributory pension when they reach the age of 65. If, however, a person was allowed the option of retiring with full contributory pension when they completed 40 years contributions, people could qualify for a full pension from the age of 56 upwards, depending on their age of entry into insurance.
Any proposals which would allow for payment of pensions before the age of 65 would have cost implications and would have to be considered in a budgetary context.
As the Deputy will be aware the whole area of conditions for entitlement to pensions, including the question of pension age, is among the issues being examined at present by the National Pensions Board in the context of their final report on the future development of pensions generally. I expect to receive the board's final report shortly. Any changes in the contribution conditions for pensions will be considered in the light of the board's recommendations in this area.
I know there is a cost implication to the request, but I am sure the Minister will agree that many people have made major contributions to their employment and to their employers over 40 years and that they deserve to enjoy the years of their retirement, and should be given the opportunity to do so. If a number of people were allowed early retirement it would release a large number of jobs. There would be a cost factor at one end but there would be a saving at the other end in social welfare payments.
The Deputy has raised an interesting point. This matter has to be considered by the Government as a whole but there are no plans at present to reduce the pension age. To reduce the pension age by one year would cost, it is estimated, about £30 million in a full year. To reduce the age by the number of years the Deputy is talking about would have other cost implications. The National Pensions Board in their report may discuss this matter. I am awaiting their report to see what they have to say but it is very costly to reduce the pension age by even one year. The points the Deputy put forward have been discussed over the years and perhaps the proposition can be looked at again. I cannot give a commitment on it at this stage.
Does that £30 million apply to reducing the contributory old age pension eligibility age by one year or the non-contributory pension eligibility limit?
I assume it covers both. I do not have the breakdown of the figures.
Has the Minister any intention to reduce the qualifying age for the non-contributory pension from 66 to 65?
That is a separate question.
Why should I reduce the age for the non-contributory pension and not for the contributory pension?
Because the age limit for the contributory pension is 65 and for the non-contributory pension it is 66. Will the Minister consider reducing it to 65 to coincide with the limit for the contributory pension?
I will.
Is the Minister considering that?
I have not been considering doing it, but I am prepared to have a look at it.
Deputy Deenihan's question is very interesting. I have made the point over a number of years in debates on Social Welfare Bills and elsewhere. If the retiral age could be reduced to 60 years and if social welfare recipients were in receipt of full pension, I estimate that 60,000 would be transferred from unemployment benefit, the cost of which would be substantially higher than the payment of pensions. I have asked successive Ministers to examine this point. If this Minister does so he will find that even if it costs £30 million in one year the savings on the other end would exceed that amount.
That is a matter which the Government will be discussing when looking at all areas of the unemployment problem. It is an interesting concept. Various bodies have put forward the idea. It would have to be discussed by the Government as a whole in the context of tackling the overall employment situation.
On condition that jobs could be guaranteed.
Many areas would have to be looked into. It is not a matter for the Minister for Social Welfare alone but rather for the Government as a whole in the context of employment.
We do not want a mini-debate on this matter but it is not very helpful for the Minister to bandy about figures like £30 million when he is not sure what they mean. Surely what Deputy Deenihan means is that each individual who has 40 years' service should be entitled to a pension. That would have to be costed very carefully. Will the Minister withdraw the statement regarding £30 million since it is meaningless in the context of Deputy Deenihan's question?
I gave the cost of reducing the pension age by one year.
That is not relevant.
It came up in reply to a supplementary question from Deputy Deenihan. It was not meant to imply anything else. Deputy Deenihan's question was about a person serving 40 years.
