Deputy Brian Stanley was in possession when the debate adjourned.
Public Service Superannuation (Age of Retirement) Bill 2018 [Seanad]: Second Stage (Resumed)
Deputy Stanley is not here this evening so I will speak in his stead, if I may and will share the remaining time with my colleague, Deputy Brady. Sinn Féin has already made it clear to the Minister that we will be supporting the Bill, although we may propose some minor amendments at a later Stage. My party colleague, Senator Devine, spoke on the legislation when it was before the Seanad so I will not go into too much detail now. Sinn Féin recognises that the Minister is making changes to the public sector superannuation arrangements. The Bill is very similar to one prepared by my colleague, Deputy Brady, and published recently which sought to abolish the mandatory retirement age, which is our party's policy. We welcome the provisions of the Bill because we believe it is important that we do not simply get rid of people at aged 65 or 66 or even 67, as will be the case from 2021 because they have a lot of valuable experience and expertise. One of the arguments that has been made against raising the retirement age is that it could stymie jobs for younger people. However, the Oireachtas Library and Research Service has produced a very good document which points to research on this question. In terms of whether extending the retirement age limits job opportunities for younger people, all of the research and evidence suggests that it does not, so we can knock that fallacy on the head.
A circular was issued in December 2017 which applied to civil servants recruited prior to 1 April 2004 who reached the age of 65 between then and December 2017. The circular holds that if a retired employee was rehired, he or she would be paid at the minimum point of the relevant pay scale rather than at the point reached on retirement. This was intended to be an interim measure to ensure that a rehired civil servant could continue to draw a salary until he or she was eligible to receive the contributory State pension.
As Members know, if a person retires at aged 65, there is a one-year gap before he or she can collect the contributory State pension. It is not clear whether those who availed of this interim arrangement will be able to be rehired under the terms of the Bill before us, when passed, and be able to work for their previous salary and retire at the age of 70. For instance, if a person was availing of the aforementioned interim measure under the circular, he or she is now on the first point of the relevant pay scale, having been rehired. When this legislation is passed and if the same individual chooses to continue to work until aged 70, will he or she stay on that point on the pay scale or go back to the point on the scale reached on retirement? I ask the Minister to clarify that, either tonight or at a future date. The aforementioned circular also refers to three different types of workers who have reached retirement age, all of whom come under different interim measures. Are there any proposals to streamline all of these into one? Does this Bill cover that? If not, how will this be rectified?
As I have already said, Sinn Féin will be supporting this legislation although we may table amendments to it. I will consult my colleague, Deputy Brady, who published his own legislation on this issue recently and if we decide to table amendments we will run them by departmental officials in advance. We are not in the business of tabling amendments just for the sake of it.
I will contact the officials in the Minister of State's office to clarify some points. If we get clarification, there will be no need for amendments. There is no need to waste the Minister of State's time or mine on that. We support the spirit of the Bill and what it proposes. We will not oppose it on Second Stage and we look forward to working with the Minister of State on Committee Stage.
This is an important Bill, which is long overdue and necessary. It is not without its faults. Announcing his intention to introduce this Bill last year, the Minister for Finance, Deputy Donohoe, allowed for those in the public service to remain at work beyond the age of 65 under interim arrangements ahead of this Bill becoming law. This meant that public servants could remain at work but only for one year and only under certain rules, including retiring and being rehired for the year, being paid at the minimum point of entry on their relevant pay scale, and continuing to work at a reduced income but not being able to accrue pension benefits for that year. While the interim arrangements allowed for 65 year olds to remain at work those who took that option are not covered by this legislation. That is my interpretation of it. They must leave after the year whereas others will be able to remain until they are 70. I would like the Minister of State to clarify why this is the case.
This debate affords us the opportunity to discuss the wider issue of mandatory retirement for other workers who are obliged by contract to retire at the age of 65. In 2016, I introduced a Bill, which was supported by all parties, to abolish the mandatory retirement age for all workers with the exception of those engaged in certain security-related employment. The intention of that was not to force anyone to continue to work. It was to give people the choice to continue to work. There is a multitude of reasons that a person might want to continue working beyond the age of 65, whether financial or social isolation because that is where their friends are. Changes were made in 2012 for people in receipt of the State pension, particularly women. Some changes are now being made and those people await the letters about having their cases reviewed. That is an example of how people have been affected by the measures taken by this Government. If they were allowed to continue working beyond the age of 65 they would be able to continue to pay their contributions and build up their pot for retirement.
The State has created other anomalies, such as pushing the State pension age to 66, leaving a year when people are forced onto a jobseeker's payment after being forced to retire at the age of 65, instead of getting their full State pension. My party has brought forward proposals because there are two more State pension increases due, in 2021 when the age will be pushed up to 67, and in 2027 it will go up to 68. That needs to be halted because there was no consultation on it.
The Bill that I introduced passed Second Stage but has not progressed to Committee Stage. While this Bill provides for those in the public service to remain at work beyond the age of 65, the Minister of State might consider doing the same across the board for all workers who are forced to retire - many against their will - rather than picking and choosing workers he feels have the ability to work beyond 65 years of age and disregarding others, forcing them to retire at 65.
We will not oppose this for the sake of opposing it. We want the clarification I sought. I hope the Minister of State will be in a position to give that clarification. If amendments are needed, we will table them. It has opened up a broad debate on all who are forced to retire. It is a question of choice for people who want to continue working. They know whether they have the ability to work. A number on a piece of paper should not determine whether a person is fit, willing or able to continue working. They should have the choice, whether they are in the public or private sector.
I would like to refer to the wider attack on ageing and work. The human race, in the first world, is living longer but that is sometimes seen as a problem rather than as something to be celebrated. I do not know how often in my short time as a Deputy I have talked about pensions, retirement, attacks on defined benefit pensions, a move to defined contributions and companies, such as Irish Life, that were going to fold because the workers would not go onto a defined contribution. It comes up regularly in legislation and controversial issues. That is because our system sees the fact that we are living longer as a challenge rather than as a cause for celebration. If someone who is a bus driver for 40 years, like my dad was, lives into their 80s but wants to retire because they are fed up working shifts for 40 years, driving buses, putting up with Joe Public giving out to them, they should be able to retire on a decent pension and look forward to a happy retirement and long life because they have made a massive contribution to society. The same applies to all workers, particularly public sector workers.
I want to make a particular representation on behalf of civil servants and people in this House and beyond. We, the elected representatives, are the one cohort in the Civil Service who do not have to worry about their pension, or their future. That gets better the higher up we go and Members love to be Ministers or junior Ministers because they get better pensions. Taoisigh are even more lán abhaile, for life, after they retire, without having done the sort of 40-year job that people like my dad did, and others do. There is, however, a cohort that works in this House and beyond, throughout the Civil Service, that is being discriminated against and we need to take cognisance of that.
Prior to April 2004, civil servants were required to retire at 65 years and from that date new civil servants had no retirement date. In 2013, new civil servants were given a maximum retirement age of 70. I understand that is a choice and that people should be able to work longer if they wish to but there used to be a transitional pension that was equal in value to the old age pension, paid to those who retired at 65 until they reached 66. That was abolished and those retiring at 65 have to go on jobseeker's allowance for that year. In January 2021, the old age pension will not be paid until someone is 67 and, in 2028, it will move to 68.
This is the kernel of my argument. The system is forcing people to work for longer. The choice that may be given to civil servants to work for longer is a choice that they make, that one would absolutely respect, and many people want to stay in work for good, understandable reasons, but all in the Civil Service should be given that choice. It should not preclude a cohort who are squeezed in the middle.
It was announced that the retirement age for pre-2004 civil servants would be moved to 70 but there is no primary legislation in place to do that. A temporary circular was introduced to cover those people. This allowed them to apply to their head of section for permission to stay until they are 66. They had to revert to the lowest point of the non-PPP scale as opposed to the relevant point on the non-PPP scale, subject to hardship grants, which they would have to write in and apply for. Such people were deemed to have been retired and rehired. The legislation does not allow people to work beyond 66 if they so desire if they fall into that cohort. People were not asked if they wished to defer their pensions and lump sums at this point. A suite of options was not presented to them. It might be possible to repay the lump sum at this point. However, it could be offset against a final payment. It might be easier to repay the pension and offset that against restoration to full pay but once the Bill is enacted those pre-2004 civil servants can stay in employment which is rated for pensions until their 70th birthday. There is a mechanism in the Bill for this to be extended to 75. It is extraordinary how the future is envisioned with regard to the amount of work that people are expected to do in their lifetimes.
In this Bill, I need to have the terms retrospectively applied to either the date of the temporary circular or the date of the publication of this Bill. I have been asked that by civil servants in this House and beyond. It was interesting to note that a Deputy from Fianna Fáil made a contribution where he said that this Bill, if retrospectively applied, would not amount to a cost incurred on the State and therefore allowing for retrospection is not going against the intent of the Bill or Standing Orders of the House. I ask the Minister of State and other Deputies to take that on board. If necessary, we can table an amendment to that effect. It is important not to discriminate inadvertently and have unforeseen consequences in a Bill. Choice is the kernel of this. People should have the choice but I often worry that choices are limited when these things are established. I thank Members for their time.
There is general agreement on this Bill. It has been coming for a long time. People have sought it because of the gap between the retirement age at 65 and the State pension being available at 66. I have a constituent who went out sick in June of this year and was on illness benefit. He retired in October, a month ago, and the Department of Employment Affairs and Social Protection said that he should stay on the illness benefit rather than going on jobseeker's allowance for the year since it was the same payment and would not have much effect. He was impacted by the fact that the doctors insist that he has to come back every week for his certificate. He pays €15 every week to get that certificate and we are trying to get that sorted out for him.
That gap has caused problems for many people in different ways. It has impacted on them in different ways. This Bill is for public servants only. A section provides for a new compulsory retirement age of 70 for public servants as defined by the Bill. It also provides that the Minister may make an order for a further increase in the compulsory retirement age for the relevant public servants in the future, up to a maximum of 75 years. There are also provisions in the Bill that a Minister must consider before making such an order.
The other part of the Bill that I think is important is that those who have about 38 years of pensionable work done will have the option to stay for another two years to accrue pension entitlements up to 40 years. It is only should they wish to do so and it is important that that is reflected from this Bill into the workplace. I will make the same point made by Deputy Bríd Smith. I was asking around how this would impact or if it has impacted on anybody. I believe many health workers are affected too, whereby they retired this year or late last year. They got their lump sum package. They are probably on approximately €100. It may depend on how many years one has on one's pension. They are rehired on the first point of the pre-1995 pay scale. That effectively means that they lose approximately €180 a week and their percentage and allowances too. This has a big impact on one's wages. One is rehired until 66, when one has to go. I want to make the same point as Deputy Bríd Smith, that this has to be looked at. I will be looking at it and trying to amend the Bill, looking at how we can retrospectively deal with this cohort of workers who want to stay on a bit longer and to work, possibly up to the age of 70, and we are not giving them that option. That is discriminatory, even though the Government knew this when bringing in the circular in December 2017 to allow that interim situation to be dealt with. These workers had no choice. They could not refuse if they wanted to stay on to 66. There has to be a way to facilitate those workers. There are not many but they exist. The Minister sent a circular to human resources units in the public service asking them to check if people who have taken that interim deal would be interested in staying on after 66 and to see how many workers would be affected. There would be no cost to the State and the Minister should seriously look at dealing with it.
It is not workers' fault but in many ways the fault of the Government for not bringing this legislation in much quicker. Deputy Brady has a Bill from a year and a half ago that could have been processed through the Dáil a year ago. A similar Bill was tabled by someone from the Labour Party a number of years ago, before the last Dáil. There were opportunities to deal with this issue and this small cohort of workers who should not be discriminated against would not be in this situation if it was dealt with. I support the general thrust of the Bill. It should be made an option for private sector workers too but we are dealing with this specific Bill. I know Age Action has addressed the matter of this group of workers. Can we deal with it before this Bill is enacted? I ask the Minister to seriously consider that.
I thank Deputies for their useful contributions. It is clear from their remarks that there is general support for the Bill. Once this legislation has been commenced, public servants who reach the age of 65 will be in a position to continue working until they reach the age of 70 on their current terms and conditions, should they wish to do so. While the temporary interim arrangements accommodate public servants to work until they reach the age of 66, the age at which they qualify for the State pension, I accept that these arrangements are not ideal. Legislative change is required to address the matter effectively. Once the Bill is commenced, no additional public servants will need to avail of the interim arrangements. The Minister of State, Deputy D'Arcy, looks forward to a constructive debate on Committee Stage. I hope that we can pull together to ensure the timely enactment of this Bill so that as many public servants as possible are in a position to benefit from it. There will be more time on Committee Stage to discuss in detail the issues raised by Deputies, but I will make some brief comments on the main issues raised before concluding.
Deputy Cowen mentioned the time it has taken for this Bill to be brought before the Oireachtas. The policy change was approved by Government on 5 December 2017 and the Bill was published only eight months later, on 9 July 2018. While this is a short Bill, a significant amount of legal consideration and stakeholder consultation is necessary in the preparation of any legislation and this Bill was no exception.
The Bill affects in the region of 180,000 individual public servants with different pension schemes and retirement age provisions. It was essential that the necessary research was carried out to ensure that all of the intended cohort was covered by the terms of the Bill. The Bill passed through the Seanad in July, a matter of days after it was published and commenced Second Stage in the Dáil in October, only a few weeks after Deputies came back from the summer recess. While further progress of the Bill through the Dáil is now ultimately a matter for the Business Committee and the Members of the Oireachtas, I know the Minister is hoping that it will be treated as a priority to enable the Bill to complete the remaining Stages in this House without delay.
Deputy Cowen also questioned the exclusion of "new entrants" from the definition of "relevant public servant" in section 2. The term "new entrant" as defined in the Public Service Superannuation (Miscellaneous Provisions) Act 2004, which this Bill is amending, means the cohort of public servants recruited between 1 April 2004 and 31 January 2012. These public servants have no requirement to retire on age grounds, as per section 3 of the 2004 Act. They can already stay to age 70 and beyond and the Government decided not to impose a retirement age on this group. That is the reason they are excluded from the definition of "relevant public servant" in this Bill. The Bill only affects public servants recruited prior to 1 April 2004, as this is the only cohort who must retire before the age of 70 years currently. Once this Bill is commenced, no public servant, other than the uniformed grades, will be required to retire before reaching the age of 70.
Some Deputies have raised the issue of mandatory retirement in the economy in general, in both the public and private sectors. The Minister for Public Expenditure and Reform only has responsibility for the terms and conditions of employees in the public service and is addressing the retirement age issue in that sector by way of this Bill. In the private sector, there is no statutory retirement age but compulsory retirement ages are generally established by individual employment contract or merely by custom and practice. That is entirely a matter between employers and employees, within the scope of equality and employment legislation. In 2017, the Workplace Relations Commission published a code of practice setting out best industrial relations practice in relation to retirements and requests for longer working. The guidelines arose from a recommendation of the report of the Interdepartmental Group on Fuller Working Lives, which was chaired by the Department of Public Expenditure and Reform. These guidelines, which are set out in Statutory Instrument No. 600 of 2017, may be of interest to Deputies and their constituents.
A number of Deputies have argued that the group of public servants that has engaged in the interim arrangements should be covered by the legislation. When the Government announced this policy change in December last, it was recognised that there would be a group of public servants that would lose out because of the time required to effect the change by primary legislation. Rather than excluding this group altogether, temporary arrangements were put in place to allow public servants who reached the age of 65 before the change in the law to remain at work until they reached the age of eligibility for the State pension. That addresses the problem whereby many public servants have to retire at 65 but do not qualify for the State pension until 66, which was the main driver which gave rise to the increase in the compulsory retirement age. In designing these arrangements, due consideration had to be given to the current statutory position, which is that these employees have a compulsory retirement age of 65. In that context, public servants retire and receive their lump sum and pension benefits at 65, but are given the option to continue working on a fixed-term, non-pensionable basis for one extra year.
I am sure Deputies will appreciate that there will always be a group of people who lose out on changes in the law due to timing. That is an unavoidable aspect of changes in policy and the interim arrangements were put in place to lessen the blow for those people. It is not possible to offer public servants who have reached the age of 65 and availed of the interim arrangements the exact same conditions as public servants who will not have reached the age of 65 until after the commencement of the Bill. If that were possible, there would be no need for this legislation. We can, however, debate this further on Committee Stage.