Joint Committee on Social Protection, Community and Rural Development and the Islands debate -
Wednesday, 27 Sep 2023

General Scheme of the Social Welfare (Amendment) Bill 2023: Discussion

An Cathaoirleach

Apologies have been received from Senator Mark Wall. Members participating in the meeting remotely are required to do so from within the precincts of Leinster House only. I remind all those in attendance to make sure that their mobile phones are switched off or on silent mode.

I welcome the witnesses. I wish to point out that they are protected by absolute privilege in respect of the presentations they make to the committee. This means they have an absolute defence against any defamation action for anything they say at this meeting. However, they are expected not to abuse this privilege and it is my duty as Cathaoirleach to ensure this privilege is not abused. Therefore, if their statements are potentially defamatory in respect of an identifiable person or entity, witnesses will be directed to discontinue their remarks. It is imperative they comply with any such direction. Witnesses are reminded of the long-standing parliamentary practice that they should not comment on, criticise or make charges against any person or entity by name or in such a way as to make him or her identifiable, or otherwise engage in speech that might be regarded as damaging to the good name of the person or entity.

Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against any person or entity outside the Houses or an official either by name or in such a way as to make him or her identifiable.

The committee will now consider pre-legislative scrutiny of the general scheme of the social welfare (amendment) Bill 2023. The scheme aims to deal with a broad range of pension related measures, including the introduction of new flexibilities to the pension age of 66; provision for people to be given the choice to work until the age of 70 in return for a higher rate of State pension; a move to the total contribution approach exclusively over a ten-year period when calculating the rate of State pension, which was recommended by the pension commission; the introduction of a contributory State pension provision for long-term carers of more than 20 years, for the very first time; a commitment to explore a new scheme to support people who cannot continue to work in their early 60s and; the long-term sustainability of the State pension system to be addressed through gradual, incremental increases in social insurance rates.

The committee endorses the recommendations of the pension commission and welcomes the general scheme of this proposed legislation. The committee released a call for submissions last month and the closing date for the receipt of submissions was Friday, 15 September last. The committee did so because it is the strong view of the members, and the Oireachtas more generally, that inviting public submissions enhances the role of the general public and interested stakeholders in lawmaking. Disappointingly, despite requests to do so, the Department failed to make the general scheme available before the closing date for submissions, which has sadly forced this committee to bring the situation to the attention of both the Ceann Comhairle and the Business Committee. The Business Committee, at its meeting last week, has now requested that the Government amends the Cabinet handbook to ensure that all legislation referred to the Oireachtas for pre-legislative scrutiny will also be made available to every citizen in the State, thus facilitating more informed engagement in the lawmaking process. However, should the committee even at this late stage receive responses to its request for submissions from the public, they will be included in the committee's pre-legislative scrutiny report.

I welcome Mr. Tim Duggan, the Department's assistant secretary with responsibility for pensions, Mr. Colum Walsh, principal officer, pensions policy, and Ms Orlaith Mannion, principal officer, legislation and planning. They are all very welcome here this morning. I now invite Mr. Duggan to make his opening statement.

Mr. Tim Duggan

I thank the committee for the invitation to come along this morning to discus the general scheme of the social welfare (amendment) Bill 2023. As you say, Chair, I am joined by Ms Orlaith Mannion, who is the principal officer in charge of legislation and planning and Mr. Colum Walsh, who is the principal officer in charge of pensions policy. Between us, I hope we will be able to help the committee with any queries members may have as we go through the morning.

As the committee is aware, the Commission on Pensions was established in November 2020 to examine the sustainability of the State pension system and the Social Insurance Fund, SIF. This was done in fulfilment of a programme for Government commitment. Essentially, the purpose of establishing the commission was to review the evidence as to the necessity for changes to the State pension system and, if it determined that such changes were required, to give its recommendations as to the precise nature of those changes. The report of the Commission on Pensions was published on 7 October 2021. Following publication of the report, the Government engaged in detailed consideration of the recommendations, including seeking the views of this committee. In September of last year, the Government issued its response to the recommendations and set out its plan for implementation. Part of the implementation is now provided for in the draft heads of the general scheme.

The draft heads seek to introduce three key measures in the reform of the State pension (contributory) system, along with a number of necessary consequential amendments to give effect to these. The three areas are: first, an enhanced pension provision for long-term carers of incapacitated dependents. The second is a system to allow people to defer drawing down their State pension (contributory) up to the age of 70. The third is changes to how the State pension (contributory) is calculated.

I propose to sketch out the broad parameters of each of these elements as contained in the general scheme. First, the Government has acknowledged the important role that carers play and is fully committed to supporting them in that role. In that context, the programme for Government committed to “examine options for a pension solution for carers, the majority of whom are women, particularly those of incapacitated children, in recognition of the enormous value of the work carried out by them”.

At present, home-caring periods and homemaking disregards only apply and deliver value if a person has a minimum of ten years' paid PRSI contributions from employment or self-employment. While this is believed to be fair and appropriate in the case of child rearing, it may not be sufficient to deal with people who have to devote a large part of their lives to caring for an incapacitated relative. People who leave the workforce early to care for an incapacitated child or other relative can find it difficult to accrue these ten years of paid contributions. In addition, periods spent caring can reduce the overall number of reckonable contributions that a long-term carer can accrue.

The Pensions Commission felt that the role of long-term carers and the value they deliver to society needed to be recognised in the pension system. In considering the issue, it particularly noted that the burden of caring, and the consequential loss of pension entitlement, falls disproportionately on women who comprise 80% of carers allowance recipients and 93% of domiciliary care allowance recipients. Accordingly, and having considered approaches in other countries, it recommended that long-term carers of incapacitated people should be given access to the State pension - contributory - system by having retrospective contributions paid for them by the Exchequer for gaps in their contribution history arising from that caring. Long-term carers were defined as those caring for 20 years or more.

The draft heads are designed to give effect to this recommendation by defining long-term carers for the purposes of being attributed contributions to cover the gaps in their social insurance record where they have cared for an incapacitated dependent for more than 20 years. Long-term carers will be able to register their caring periods with the Department to ensure that the contributions are awarded.

Second, while the Government decided not to increase the State pension age, it recognises that there is a trend to people working longer. In this context the programme for Government committed to:

Introduce a system to enable people to defer receipt of their state contributory pension on an annual basis, to include actuarial increases in payment...

Facilitate those without a full social insurance record to increase their retirement provision by choosing to continue making PRSI payments beyond pensionable age

Accordingly, the Government agreed that provision should be made to allow people to extend their working lives and defer access to State pension, where they have capacity to do so. In return, such people will receive an increased State pension payment calculated on an actuarial basis. The benchmark reference State pension age will remain at 66 years, as will entitlement to ancillary age-related benefits such as free travel. However, people drawing the pension at or after the age of 67 will receive an increased rate of payment for each full year that they defer drawdown.

Introducing pension deferral arrangements will also enable people who do not have a full contribution history to improve their contribution record.

As a consequence of introducing a system of deferral, the draft heads also provide for the payment of PRSI by those who choose not to draw down their State pension - contributory - and for access to a range of working-age schemes, which currently cease at age 66, to be extended to those who choose to defer.

Third, as the committee is aware, the interim total contributions approach and yearly average are calculation methods for the State pension - contributory - payment rate with the “best of both” calculations currently being used. The Pensions Commission recommended the full transition to a total contributions approach only and the abolition of the yearly average approach to be implemented as soon as possible with a transition period of ten years. The transitional arrangements are to avoid a cliff-edge effect and to soften the impact of the move on the first cohorts. During this transition period, individual pension rates will be based on the best of the total contributions approach on the one hand, or a rate based on a mix of the yearly average and the total contributions approach on the other. The proportion accounted for by yearly average will reduce from 90% to zero over ten years and the proportion accounted for by total contributions approach will increase commensurately.

The Pensions Commission also recommended that the current model of interim total contributions approach, also known as the aggregated contribution method, should become the definitive total contributions approach, meaning that 40 years or 2,080 contributions are required to qualify for a maximum State pension - contributory - payment rate. This includes provision for ten years of PRSI credits and 20 years of home-caring periods, but with a cap of 20 years of combined PRSI credits and home-caring periods.

The total contributions approach is a fairer and more transparent system where the person’s lifetime contribution will be more closely reflected in the benefit received. This approach will eliminate the anomalies inherent in the current yearly average system, for example, where a person joins the social insurance scheme at 55 and gets a full pension versus a person who has worked on and off for 39 years since school and may get a 90% pension. It is proposed that the transition will be on a phased basis over ten years commencing in 2025.

I hope the combination of this short summary of the objectives of the measures and the explanatory notes in the general scheme have given the committee the information it needs to consider these provisions. As I said, Ms Mannion, Mr. Walsh will do our best to provide clarifications and answer any questions members may have.

An Cathaoirleach

I thank Mr. Duggan. Before I bring in Senator Murphy, I wish to make one request. A very clear explanatory document on this transitionary period needs to be designed in conjunction with the National Adult Literacy Agency, NALA. It needs to clearly lay out how this calculation is taking place. In fairness, the Department is very good at doing this anyway. It will cause considerable confusion when people have two options for the calculation. The Department will need to clearly lay out both of those and the resulting figures. A certain amount of consideration will need to be given to how this is communicated with the applicants themselves. I think the Department of Social Protection is the benchmark in doing that. While not everything is perfect, it does its best to do it. I must say that the local authority system is absolutely appalling regarding the means-test calculation for rent. Someone would want to be a professor in accounting to be able to work it out. I ask that the Department would specifically look at that so it can be easily communicated to people. That should be done that in conjunction with NALA which it would normally do anyway. We can bank that.

Senator Eugene Murphy

I have just a short contribution. I support the Chair's comments on the local authorities. That assessment seems very difficult for people and it is a bone of contention. I hope Mr. Duggan can take on board what the Chair said.

If Mr. Duggan already covered this, I may have missed it. When people defer their pension and continue to work on, for how long can they defer the pension? The only other thing I have to say is that I very much welcome the attention to carers. As the Chairman knows and as I know, people might have only put in five, six or seven years' work. They might have a child who might be sick from an early age. They do not have the ten years' work accumulated. It is really important to address that issue. I welcome that and obviously there will be more discussion on this. For how long can a pension be deferred? I just missed out on hearing that. Is there a timescale?

Mr. Tim Duggan

There is a timescale. You can undo the provisions that are proposed. A person may be able to defer up to the age of 70 so he or she can draw down his or her pension at any age between 66 and 70. When he or she draws it will determine the enhanced rate of payment he or she gets. Each enhanced rate is calculated on an annual basis so there is a rate for 67, a rate for 68, a rate for 69 and a rate for 70.

I assure the Cathaoirleach that the Department is planning a major communications campaign. Ordinarily when we put these together, we also include pen pictures to give people as close to real-life examples as we can of how the calculation works and what the impacts will be. The Cathaoirleach will note that we are not introducing the TCA changes from 1 January 2024. We have pushed that out to 1 January 2025 to facilitate those communications and better understanding of how that will work. Hopefully, we will do a good job of it but we certainly intend to.

Senator Eugene Murphy

A significant number of people reach the age of 66, do not want to retire and are more than willing to work. It is great to make this change. On a wider level, the State will have to address that issue as well because there are loads of people who would be more than willing to work. I mention in particular community supports. Whoever is in power will have to make a broader change to accommodate those people.

An Cathaoirleach

I am glad Deputy Ó Cuív is here because I was taking notes to point out some of the issues he regularly raises. It is much easier if he makes those points himself.

Deputy Éamon Ó Cuív

This is very interesting. Could Mr. Duggan confirm whether I am correct in saying that in respect of the enhanced pension you get by deferring, you will be allowed to get to 66 and then you defer to 70 and continue working but there is nothing to stop you drawing it and continuing to work. That is the first thing we must stress. There is no connection between entitlement to the pension and whether or not you continue to work.

According to my calculation of the figures were given, if you had the full State pension, you would be playing a lotto game as to whether you would live longer than 83. The crossover point was about 83 whereby you would have recouped what you lost in the years during which you did not draw down your pension by the enhancement. This is not great value for men. Women tend to live longer than men. If somebody in that situation came to me, I would tell them that I would worry about 83 when I got to 83 and take the money now because I would be better off right up to 83. Therefore, this is really for people who do not have full contributions, who want to have full contributions or enhance their pension by working longer. This, of course, is the challenge of the 40-year rule we have. Could Mr. Duggan confirm whether I am correct?

Mr. Tim Duggan

The Deputy is probably correct. The idea of the enhanced rate is that it is an actuarially enhanced rate. It is not intended to enrich people. It is intended to be as cost-neutral as possible. When you enhance something actuarially, it obviously takes time to absorb that so it probably is around 83 that the balance is struck. It works the other way in the sense that if you live longer than that, you obviously gain significantly because you are on this significantly enhanced rate. It is an actuarial balance that will be struck when the rate is set.

Deputy Éamon Ó Cuív

I am probably the person nearest the age of 83, therefore, I have the greater chance of actually reaching 83 than anybody else in this room and, thankfully, I am still in good health. I still would not take the actuarial risk. If I was asked the question and had the option, I would take my pension now rather than take it later because it is not a great bet. All I am trying to say is that I am correct in my assumption. There is a crossover point and I calculated one day that it was 83. You would love to play a guessing game. It is like putting money on horses. You take your punt and defer it now. It is not a good option if you die at 72, 73 or 74 but as you go on, you get nearer and nearer to the crossover point so we are agreed on that. It is important that we do not give the impression that by deferring it, there is an enhancement for everybody. There could be a very significant loss for some people and the nearer you die to the age of 66, the greater the loss if you defer it.

With this law, the Department is confirming permanently even though the original proposal had been 30 years. That is the proposal - that is, that it is 40 years' worth of contributions.

Mr. Tim Duggan

We are. It is already in law so the contributions-----

Deputy Éamon Ó Cuív

Yes but only for TCA. It is not in law.

Mr. Tim Duggan

It is already in law for TCA. All that is happening is that over the next 11 years, we will transition totally.

Deputy Éamon Ó Cuív

I will come to that in a minute. We are confirming that because the TCA came in, due to the issue with women that arose when the disastrous decision was made in 2012 that particularly disadvantaged women when what had been three or four rates became far more rates in terms of the average number of stamps you had to have. The averaging system disimproved, there was a row about that and TCA came in. Prior to that, the Government made a decision that it would be 30 years.

Mr. Tim Duggan

No that was not a Government decision. That was in the pensions report back in the noughties.

Deputy Éamon Ó Cuív

The Government did not query the 30-year rule because I was in Cabinet at the time. We are just confirming the 40 years, which can be a challenge for some people but that is fair enough.

What is the logic behind only allowing 20-year caring periods for children? This seems to discriminate against spread-out families. If you have three or four children and there is more than eight years between them-----

An Cathaoirleach

Is the Deputy talking about the home caring credit?

Deputy Éamon Ó Cuív

Yes.

An Cathaoirleach

There is a maximum claim of 20 years.

Deputy Éamon Ó Cuív

If there is more than eight years between the first and the last child, you cannot get the home caring credit.

An Cathaoirleach

The full value of it.

Deputy Éamon Ó Cuív

You cannot get the full amount. You can only get 20 years but if you are home caring for 24 years and if we decide that you need 12 years to rear a child, why was a limit placed on the home caring credit for children?

Mr. Tim Duggan

You either accept that there should be a limit or you do not accept that there should be any limit. If you accept that there should be a limit, you have to pick some limit and 50% of the requirement seems a reasonable place to land. It is incredibly generous compared to systems elsewhere. You either accept that there is a limit-----

Deputy Éamon Ó Cuív

You have to have ten years of stamps anyway so you could go up to 75%. Not that many people would be affected but there are some who have spread-out children.

Mr. Tim Duggan

A home caring period is similar to a credit in the sense that it means you get contributions on your record that no social insurance contribution has been paid for. In those circumstances, you either accept that you are willing to give away as many of those as you wish for nothing or that there should be some limit on them.

Deputy Éamon Ó Cuív

The interesting thing is in respect of the ordinary credits that were not paid for earlier on such as jobseeker's allowance, if you worked for ten years and went on to the jobseeker's allowance for 30 years, you got 30 years worth of credits.

Mr. Tim Duggan

That was under the early averaging system. Under the TCA system, you will only have a maximum of ten years.

Deputy Éamon Ó Cuív

So the TCA system is really trying to cut back on credits.

Mr. Tim Duggan

TCA is trying to make the system fair.

Deputy Éamon Ó Cuív

No. Fairness is not an objective.

An Cathaoirleach

I ask the Deputy to please make his contribution and then let Mr. Duggan answer because it is too confusing for the exchange to go back and forth.

Deputy Éamon Ó Cuív

With regard to fairness, particularly at this time of the year we are being bombarded on every side and everybody says this is unfair. Everybody has a different view of what is fair and unfair so that is a subjective issue.

An Cathaoirleach

Yes, and the other bits.

Deputy Éamon Ó Cuív

I, therefore, still do not understand the logic of cutting the entitlement to carers. This is becoming a big problem. It is getting very hard to get the invalidity pension; it is easier to get disability allowance. We have all sorts of funny anomalies coming. I do not think people can get credits for disability allowance. When we are considering the care fund in the Bill, we should consider caring credits as a big issue that affects all sorts of people. Of course, people can get full invalidity pension, which does not take that long to get as it is five years, I think. There are also reckonable years and all the rest. Once people get the pension, they automatically get the full pension even if they have only worked five years, which is fair enough. That is a great idea and fair. Kindness is fairness. I have had cases on the averaging system where people had long-term credits, and had paid their contributions to ten years. They are not going to be in a good situation, particularly if they did not have children at home.

Mr. Tim Duggan

The thing to remember is it is a contributory system that works on the basis that people make contributions of money into the system to sustain it. The Irish contributory system is very generous in terms of the credits and home-caring periods that it provides compared with other countries in the EU.

If credits and home-caring periods are to be introduced to a contributory system, it means we either accepts that people can access a full contributory pension with little or no payments or we put limits on that and the Government has decided, following a recommendation by the Pensions Commission, that the limit on home-caring periods should be 50% of the time that is required to build that contributory record.

Deputy Éamon Ó Cuív

The committee should examine this issue in detail.

Mr. Tim Duggan

A person who is able to claim 20 years of home-caring periods means that he or she has 30 other years of his or her working life to build up paid contributions. That is the balance that the Government thinks is reasonable and is proposing in these heads.

Deputy Éamon Ó Cuív

The Chairman knows what happens in real life. He knows that all sorts of circumstances arise, which we hear when we sit in our clinics, that people who have worked all their lives often really do not understand. In particular, for women who provided care but are coming through the system and were not in the era of full employment, or were not in the era of two always working and being forced to work to get a house, survive and pay the bills, it will be a long time for this generation. Even in the five years things have dramatically changed in that direction, as there has been huge unemployment. This committee needs to examine this matter. The Chairman could also suggest that we invite in representatives of the bodies that represent the unemployed. I spend my life looking at people's contribution records and calculating. There are so many calculations that can be done. For a dependant adult, one would run into walls with that one. In terms of funding, there is the non-contributory pension, the TCA, a much more complicated TCA structure and there is the average system. We have clear systems at the moment. Now, we are going to the average of the TCA for a dependant adult and the non-contributory pension.

Small farmers are particularly badly hit. They were not allowed to get a credit if they drew down farm assist. The Department has consistently refused to give them credit for the years a person receives farm assist whereas if they had taken the disadvantage in the means test and gone on jobseeker's allowance and kept farming, they would have got the credit. This committee needs to determine a lot of issues even though the general scheme looks neat and tidy on paper. We should also look at the situation for bigger families with more spread out families.

Deputy Marc Ó Cathasaigh

I thank the Department for their work. The three main provisions that have been provided for, which are the result of the work done by the Pensions Commission, are welcome and they are a move in the right direction, notwithstanding Deputy Ó Cuív's comments who has experience in this area over a long number of years.

I echo the point made by the Cathaoirleach about the late arrival of the general scheme and how it should be presented to people in a timely fashion. The Cathaoirleach mentioned the general public but this applies to offices and research capacity within all of our teams because the Bill is fairly substantial and is not easily accessible. It is not a good night-time read and requires resources to get to grips with it. Even at that, I have not got to grips with it and a lot of the devil will be in the detail when we reach Second Stage. To allow the public to engage with it in an educated way and allow us as legislators to engage with it in a more comprehensive fashion, it would have been helpful if we had received the general scheme in a timely fashion.

My questions are on the home care credits. The provision to move 20 years' accessibility is very welcome. Will availing of any other social welfare benefit during the 20 years count against the inclusion of those years? I ask Mr. Duggan to tease out the matter in more detail.

Am I correct that a person can work up to 18.5 hours? How will the time be monitored over 20 years? Do we end up facing a cliff edge if someone strays over 18.5 hours? How quickly afterwards does the impact flow? Will the provision create a disincentive to work? If somebody engages in home caring, that is fine and he or she should be rewarded accordingly. One of the things that this economy does not do is value caring work in the way that it should. If somebody is in a position to work more hours, is a disincentive created to engage in that further work by saying that the person will face into a cliff edge in terms of their contributions and pension?

Mr. Tim Duggan

The hours have been increased to 18.5 hours; the number used to be considerably less.

An Cathaoirleach

Like a mighty wave, it might have gone up further but that is an argument for another day.

Mr. Tim Duggan

The hours are a considerable period in a working week. The idea is that people cannot work full time because they have this caring requirement. Again, although the Chair may disagree, 18.5 hours in the working week was considered to be a reasonable compromise between incentivising people to, on one hand, do some work and earn an income and, on the other, fulfil their caring responsibilities. That is the basis used for determining carer's allowance and that is the basis that will be used to determine access to the long-term caring credit as well.

Deputy Marc Ó Cathasaigh

I will dwell on that for a moment.

Caring responsibilities wax and wane over a person's lifetime. We are talking about a 20-year period here. It could be that the person being cared for has a period of good health or a period of worsening health. How are we keeping track of that over such a long period? How can it be meaningfully translated into this pension provision at the end of that time so that people do not feel trapped within that situation and, when the caring needs are less, are able to get out to work more without feeling they have stepped over that cliff edge? Similarly, the caring needs may increase. They can wax and wane over time. The person being cared for is not necessarily going to stay in exactly the same state of health or have exactly the same needs over a period of 20 years, which is what we are talking about. How do we envisage affording that flexibility in terms of accounting when we look at it over this 20-year period?

An Cathaoirleach

Before Mr. Duggan responds, I will make a comment in the context of the 18.5 hours but it articulates the comment Deputy Ó Cathasaigh has made. To take a child with a disability for example, the parent, usually the mother, will be caring for that child full-time between the ages of nought and five. When that child then goes to school, he or she will be in school for 28 hours a week, but the mother can only work a maximum of 18.5 hours. When that child goes on to secondary school, the threshold increases again. If the child then goes into a training centre after his or her 18th birthday, it will go up again. The point I was making was that, where there is legitimate provision of care through education or training, there should be flexibility beyond the 18.5 hours. Deputy Ó Cathasaigh's point also articulates the variation. We are talking about caring for an incapacitated child, which is the primary intention of this provision. Other people will be eligible but that is the primary intention. While the level of care will remain constant, the hours of care will alter over time.

Mr. Tim Duggan

I hope two things do not get confused here. In terms of tracking, there are a couple of things. If somebody is on one of our schemes, such as carer's allowance, carer's benefit or domiciliary care allowance, we obviously have records and are able to track all of that. Second, we are setting up a register where people can record and register with us their periods of care. Where they relate to social welfare scheme claims, we will be able to correlate those but, where they do not, we will set out for people how they can support their claim for those caring periods on the register. That is how we will do a lot of the tracking.

The issue of somebody working more or less than 18.5 hours is, in one sense, a red herring because anyone who works more than three hours and a certain number of minutes a week gets a class A contribution and so their record is increasing all of the time. It only really applies where somebody is seeking to claim the long-term carer's credit, in other words, where they have been caring for an incapacitated individual for more than 20 years. It only kicks in once that 20-year threshold is met and the Department will take quite a generous view of that. Even if a person has been working during that time, as long as it was for less than 18.5 hours per week, that period will be included in the calculation for long-term carer's credit, LTCC, purposes.

Deputy Éamon Ó Cuív

Do they not get a contribution if they are earning more than €38 a week?

Mr. Tim Duggan

That is what I mean.

Deputy Éamon Ó Cuív

They would not need caring credits.

Mr. Tim Duggan

It depends. They may. I can dream up examples of where somebody could need it, in the same way the Deputy can dream up examples of somebody having 24 years of minding their children. We can easily----

Deputy Éamon Ó Cuív

No, the 24 years example is simple mathematically.

An Cathaoirleach

We will hear Mr. Duggan without interruption. I will bring Deputy Ó Cuív in afterwards.

Mr. Tim Duggan

I am simply saying there are quite a number of instances where people can be working for a while but also caring full-time, or close to full-time, for an incapacitated individual and that getting the 20 years of long-term caring credits could be critical to them achieving either a large enough record to get a contributory State pension or a full record. We will count both, where that applies.

Deputy Éamon Ó Cuív

I suggest that introducing this complicated mix of a total contributions approach, TCA, and averaging on 1 January 2025 is a bad idea. The election is due in February 2025 and I always say-----

An Cathaoirleach

It is due in March 2025.

Deputy Éamon Ó Cuív

It will be called in February. I believe 20 February is the latest date on which it can be called. I always think it is foolish to introduce change at that time in the cycle because it is a bad situation in which to try to explain that change when it suddenly hits people. Perhaps we should make a recommendation on that.

An Cathaoirleach

Perhaps Mr. Duggan knows something about the election that we do not.

Deputy Éamon Ó Cuív

The only one who knows anything about that is the Taoiseach.

An Cathaoirleach

I note the point the Deputy is making, however. Does he want to make any other comment? Mr. Duggan might take note of that and have a word with the Taoiseach about the election day.

Deputy Éamon Ó Cuív

I will go back to the child issue. First, let us be honest about it; this country is incredibly short of children. We are forecasting an ageing population and wondering how are we going to sustain it. The only antidote to that particular challenge is to have a population that is sustainable in the long term. Many European countries are now facing up to this challenge. It is a personal choice whether people have children but the State can have a strong influence on that choice, for example, where housing is unaffordable for people. In my view, many people would like to have children but are putting it off because they cannot afford it. We are therefore not neutral on increasing the choice - and purely the choice - to have children. From the State's point of view, it is desirable that there are children because otherwise you eventually get what you should not get, a pyramid where there are more at the top than in the working-age group. We sit here month after month with all of these dire predictions about lack of PRSI income in the future because of demographic trends so, in my view, we should see children as a great national good. I am big into watching football and I always say that, where I live, the entertainment is mainly provided to us by the young people because we go to the under-12s, under-16s and under-18s matches. I have never bought into this idea of them being dependants or non-contributors to society.

In that context, if somebody has four children or happens to have had their children very spaced out, it is not just a conjectured scenario but a reality that arises. That is a certainty. The point I was making is that, if you are working and earning more than €38 per week, which I believe amounts to three or four hours at minimum wage, you get an A stamp. You will obviously count your pay contribution, which is always superior in value to a credited contribution, for those periods. That was the only point I was making. To me, with my limited knowledge of social welfare, that is an absolute certainty, as long as you are in an A-classified job. My view was and is that everybody should pay the A rate. I tried to move in that direction when I was Minister. I believe we should get rid of all of these A, B, C, D and E rates and that every working person, irrespective of where they work, should pay the A stamp. The idea of Deputies paying K stamps is totally unfair on young Deputies. I can say that because I have no skin in the game as I am older than 66 and it makes no difference to me.

The idea of not giving everybody an A stamp is very retrogressive and I believe that is one simple amendment to the code which we should make.

An Cathaoirleach

I thank the Deputy. I agree with him on his first point and I believe that the committee can make a recommendation so I will not be asking Mr. Duggan to come back on that point. Mr. Duggan has left the position of the Department very clear in that respect. It is within the remit of this committee to make a recommendation along those lines on that particular provision. We have the flexibility to make whatever recommendations we like with regard to the total contributions approach, TCA, and I believe that is something we will need to look at further.

Is there anything in particular which Mr. Duggan wished to come back on? I do not want him to be revisiting the points that he has already made.

Mr. Tim Duggan

I will agree with the Deputy when he gives that example of somebody working and not needing the home caring period or the credit in many cases but there are some cases where somebody may have worked and cared at the same time and may not have worked long enough to have the ten years of contributions and may not have cared exclusively long enough to get the 20 years of long-term caring. I am saying that where there was caring during the working period, we will put them together to ensure that person is eligible for long-term caring of 20 years. That is all. It is actually beneficial and advantageous to people. We are taking a very generous approach to it and there will not be cliff edges around such matters. That is all I am saying.

The class A issue has been debated on numerous occasions and I am going to plead that it is beyond my pay grade now and that it is entirely a political matter at this stage.

Deputy Éamon Ó Cuív

Some people get the carer's allowance. A fair number of people, particularly if they have spouses or partners in very good jobs, do not get carer's allowance because it is means-tested but they get a one-off payment every year. My question is will they be getting a year's caring credits, allowing that they have not been paying contributions based on that payment being payable in June of every year, because that payment in June is actually for caring in June and is not for caring for the full year. How are those people going to be assessed who are not appearing in the Department's system, if that is the case, where the person one is caring for is not eligible for TCA because they are too old as they are over 60?

An Cathaoirleach

Perhaps Mr. Duggan might explain to the committee what this register is.

Mr. Tim Duggan

The means of the household is irrelevant when it comes to the long-term caring credits.

Deputy Éamon Ó Cuív

How does the Department assess it?

An Cathaoirleach

Mr. Duggan will explain this.

Mr. Tim Duggan

If a person meets the criteria for long-term caring credits, then they get them, irrespective of the means of the household.

Deputy Éamon Ó Cuív

How does the Department establish that such people are entitled to the long-term caring credits?

An Cathaoirleach

Can Mr. Duggan explain the position with regard to the register, please?

Mr. Tim Duggan

If a person is entitled to annual carer's support grant, which the Deputy mentioned, where they are eligible for that, that means that they are caring and caring within the conditions of that scheme, which is the 18.5 hours etc.; consequently, they will be eligible for long-term caring credits.

Deputy Éamon Ó Cuív

As Mr. Duggan will know, the payment is based on whether one is caring in June or not but would we not want to give the full year? Can I clarify this point, please?

An Cathaoirleach

If I may, Deputy Ó Cuív. Can Mr. Duggan explain how this new register will apply because I believe that this covers the issue which Deputy Ó Cuív is talking about which is people who do not fit into the criteria of the definitions which are there at the moment for carer's allowance, carer's benefit, carer's support grant and the domiciliary care allowance? This new register which Mr. Duggan has been talking about is a safety net, so can he explain to us how this new register will apply?

Mr. Tim Duggan

People will be able to record caring periods which they have undertaken on a register that we will be providing.

Deputy Éamon Ó Cuív

Is that from now on?

Mr. Tim Duggan

Yes, it is available right now.

Deputy Éamon Ó Cuív

What about retrospectively because that gets the person out of jail in about 20 years time?

Mr. Tim Duggan

No, this is in respect of past periods of care.

Deputy Éamon Ó Cuív

Yes, but how does the Department establish that a person was caring and, if one was receiving the carer's support grant, does that give one the full 52 weeks cover? This is because, as Mr. Duggan will know, with the carer's support grant I have seen literalism in the Civil Service in recent years. There has been, as I say, a literal approach, where for eligibility for the carer's support grant one has to have been caring in June. That is all.

Mr. Tim Duggan

Where somebody is not in receipt of any social welfare payment that would clearly show that they had been in a caring role, if there is no evidence of that nature, we will seek other remedies. That can be testimony from other people, medical records, etc., in exactly the same way that we currently do for home caring periods. It is done in exactly the same way as it is done today.

Deputy Éamon Ó Cuív

With the home caring periods and most carer's allowances, this is going to become much more acute now. The other issue which comes up then is if one has a child, and normally there is a birth certificate, particularly for Irish born children, where it is relatively simple, where if one gives the date of birth to the Department it will pay the child benefit to the child for 12 years. This is fairly black-and-white. But where it gets into this kind of thing of making one's submission, and so on, the problem with much of that stuff is that the most disadvantaged people, in literacy senses in the State, always tend to be at the most disadvantage.

An Cathaoirleach

In the current home caring credit scheme, where the home caring credit is retrospectively being applied prior to recent years, let us say, with respect to the 20 years, and where it is not a child we are talking about, a certificate from the public health nurse or a letter from the GP, or medical records can be used to support the period of caring. That has been accepted and I have had it accepted by the Department in the past.

Deputy Éamon Ó Cuív

So have I.

An Cathaoirleach

I believe Mr. Duggan is saying that this new register will apply in the same way as the threshold which is being met for the home caring credit to date, where we are not talking about home caring credit for a child, and where that care was provided but no caring support payment was issued to that individual, which would usually be a woman. Am I correct in my comments there, Mr. Duggan, with regard to what is being proposed here?

Mr. Tim Duggan

That is it, precisely.

Deputy Éamon Ó Cuív

Where my worry is, as we have debated here ad nauseam, is that that is true but we must ensure that the law is on the side of the citizen because we have all seen things we would have expected would be granted being refused in recent times because there is a big change of attitude in the Department with respect to those types of allowances which are very hard to prove. It is amazing, as Mr. Duggan will be aware-----

An Cathaoirleach

There is a responsibility on our committee as parliamentarians to ensure that that is enshrined, in so far as we can, in primary legislation to ensure that when Mr. Duggan's replacement is here in 20 years time, that the same interpretation is taken of that. I accept that and that is our responsibility to ensure that happens when the legislation comes in. Mr. Duggan is explaining how this will apply, which is as it applies at present, with regard to the home carer credit, which, personally, I have not had an issue with as regards to this cohort, where Senator Murphy would have had similar cases of people, where the home caring credit was for an adult and where they were not, for one reason or another, in receipt of any type of carer's support payment.

Deputy Éamon Ó Cuív

I have one final question. How long have we got to consider the general scheme of the Bill?

An Cathaoirleach

It was only published last Thursday so I believe we have eight weeks from that date. We had briefed the committee here in private last Monday week that it was our intention to try to complete this by the end of next week but I am sure there will be flexibility with the Department-----

Deputy Éamon Ó Cuív

That is a bit tight.

An Cathaoirleach

-----because the Bill has only been published.

Deputy Éamon Ó Cuív

That is a bit tight, when one considers the size of the Bill. I would think-----

An Cathaoirleach

I have a number of questions I would like to put Mr. Duggan with respect to the heads of the Bill here before us.

First of all, I want to follow up on the question that Senator Murphy asked about the threshold of 70 years of age. The threshold of 65 for a pensioner, or now 66 as the case may be, was set when the life expectancy was much less than it is today. The life expectancy in 1960 was 65 years of age. The life expectancy today is 82 years of age. My question is, should we be allowing additional flexibility beyond someone's 70th birthday if they wish to contribute? I take into account the point Deputy Ó Cuív made that from an actuarial point of view, there probably would not be a huge benefit. Where there would be a benefit is from someone who has a mixed contribution record, who is in good health, working at 70 and wants to continue working beyond their 70th birthday and make a contribution if they have not reached the 40-year threshold at this stage. The witnesses might comment on that.

I have listened intently to what was said on the register of caring periods, and I acknowledge the point that Deputy Ó Cuív made. We really need to look at how this is drafted in the primary legislation. A lot of these problems, into the future, can be overcome by the carer's support grant. There is an opportunity here for the Department to redouble its efforts in making people aware of the carer's support grant. I am amazed every year when I come across people who have not applied for the carer's support grant. There is a perception that this grant is means tested and that they are not entitled to anything. There is a failure of communication on the part of us all on this. It would overcome a lot of these challenges into the future and I would strongly advise people to avail of the carer's support grant. Up to now, it would automatically have given them credits up to the 20 years. It is also one way to provide certification of that fact. It is an area that the Department needs to look at again because the system is falling down with regard to the uptake on that.

I would like the witnesses to clarify this for me. When someone reaches 66 years of age and they decide to continue to make contributions, or they decide to defer the drawing of their pension for a supplementary or enhanced pension, is it the intention that they will be able to avail of the other supplementary supports like free travel and the TV licence, etc. on their 66th birthday, regardless of whether they activate their pension? I would like to have that clarified.

One other issue that the committee has considered and made a recommendation on is about a similar application. It comes back to the caring periods that Deputy Ó Cuív mentioned regarding children. There is another cohort of people being missed in this debate today and they are foster carers. They are caught between a number of stools here. They are not actively contributing to the workforce and they are not going to be able to make those PRSI contributions but they are providing a very valuable service to society as a whole. It is the firm view of the committee, which has made this recommendation in the past, that this legislation would also incorporate provision for long-term foster carers as well as long-term carers.

On the caring periods, I want to clarify that this does not have to be a constant 20-year period. It does not have to be a period of care for a single person. It could be a number of people incrementally over an intermittent period. The reason I raise this is that we would have had - and again, this mainly concerns women - a daughter in the household whose mother became incapacitated for some reason, and carries out ten to 15 years of care. That person then passes away. Then, that woman has to try to retrain or reskill in order to try to get back into the workforce. Then her father takes ill and requires ongoing care for a period of time subsequent to that. Is it the 15 years plus the five or six with the gap in between, or does it have to be a continuous period of that, within reason? I would be grateful if the witnesses could clarify that because there is no clarity on that within the legislation.

This is something I spoke to the witnesses privately about earlier. Regarding what is being proposed here, the caveat on the total contribution issue that Deputy Ó Cuív has rightly articulated is something that we as a committee are going to have to look at in our recommendations. All of us want to see this implemented. I know that it is the intention of the Department and in the heads, we are talking about 1 January 2024. It is with the office of the parliamentary draftsperson at the moment. It is very ambitious to have this legislation passed and enacted by 1 January next, purely from the point of view of the production of the legislation. While it is simple in its objectives, it is actually a very complex piece of legislation because there are a substantial number of amendments to the whole consolidated Acts relevant to social welfare legislation. The wording of that can have very serious implications for people if there is an error in it. It is not a piece of legislation that can be easily drafted. It is this committee's recommendation that there would be provision made in the legislation to ensure that if it is not enacted by 1 January 2024, the provisions of this legislation would apply on a retrospective basis back to 1 January 2024. I would like the witnesses to comment on that.

The other question I have is on credited contributions. Let us say there is someone who is eligible for credited contributions prior to their 66th birthday under the various schemes - home carer's credit, jobseeker's benefit or allowance, or whatever the case may be - and they do not draw their pension at 66, and continue to work. Then they become eligible for some other payment that would entitle them to a credited contribution. Can that credited contribution still accrue up to the threshold of ten or 20 years as the case may be, or up to a person's 70th birthday? Then, let us say there is someone with a mixed contribution who has worked 18 years as a carer and beyond their 66th birthday. If they want to try to get a full contribution or as near to a full contribution record as they can, and then have to go back as a carer of maybe a spouse, can they get those additional credited contributions at that stage?

The other question I have is around the supplementary heads that are provided, which are the implications of these decisions for the working-age payments. I do not see any reference to the working family payment. Could the witnesses say what the implications are for someone of 66 or 67 years of age with dependent children who are eligible for the working family payment?

Finally, I want to look at head 27. I am always wary when we deal with deciding officers and when the Department introduces primary legislation on deciding officers.

Will Mr. Duggan explain what head 27 is actually about and how it will apply? I am not clear from reading the head exactly how it applies and I would like clarity on that.

Mr. Tim Duggan

The Chair can remind me about that if I forget. The age of 70 is essentially a balance that was recommended by the Pensions Commission as part of its recommendations. It also aligns with what the public service itself is doing, whereby, under law, a person can now work up to the age of 70 in the public service. It is aligning with all of those other things going on. The secondary benefits in social welfare are universally available from 70 on, so 70 is an age that is aligning. It is the age now, and there is nothing to prevent it from being reviewed or increased by a future Government or the Legislature if they choose to do that. However, the Pensions Commission recommended 70 and the Government felt that was a good balance. It aligns with the universal payments being available from 70 and with the public service allowing working to the age of 70, so it all aligns.

I take the point about people not being fully aware of the carer’s support grant and the fact it is not means-assessed. I will take that back to the Department. We plan to have many communication campaigns and I will ensure that that is fed into the consideration of the next series of campaigns around this. I have to say that communication campaigns are notoriously difficult and even though we pump an incredible amount of money, effort, imagination and creativity into material to try to grab people's attention, it is amazing how it sometimes just does not work. We are always trying to ensure that people are aware of their entitlements.

An Cathaoirleach

I agree it is not simple. However, I can tell Mr. Duggan that anytime I have spoken to someone about the carer’s support grant, they talk about the hassle and say it is just not worth doing it. However, when I explain to them that this has implications for their pension, they are very anxious to fill out the form. What I am saying is that tying it in with pension eligibility is probably a way to get more of these applications over the line.

Mr. Tim Duggan

The point is taken, and we will certainly feed that in.

Free travel is universally available from 66 and that is not going to change at all. The other payments are secondary payments related to the primary payment and, therefore, they will follow that. If somebody does defer, then they are deferring the secondary payment as well.

The long-term carer’s credit is not limited to caring for one individual but to as many individuals as necessary, and it is not limited to a contiguous period of time, so it can be broken periods of time. It is the total that is the important number, not when they happen. I can confirm what the Chair has said.

Reference was made to the provision to retrospectively apply the provisions to 1 January in the event that the legislation is not enacted by 1 January. Both the Department and the Minister would want to facilitate that, but we would have to be legally advised on how permissible it was and whether it was permissible for every single element that is within the proposed legislation. We are positively disposed to that, if the legislation is not enacted, but it is dependent on how permissible it is. We will have that assessed.

With regard to credits for people who avail of contingency payments over the age of 66 where a person continues working and then loses their job or gets ill and claims illness benefit, and so on, the proposal in the legislation is that credits would not apply in those instances. The State pension age is not changing. It is 66. Therefore, from the age of 66, nothing changes. Somebody can claim either of the State pensions at the age of 66 and nothing changes in that respect. If somebody chooses to work beyond 66 and defers drawing down their State pension, that is different from working before 66, and they are in deferral rather than not entitled. Before 66, they were not entitled to draw down a State pension. From the age of 66, they have chosen not to draw it down. They can change that decision anytime they like. That is the first point.

The second point is that people are being given access to short-term schemes like jobseeker’s payments and illness benefit to facilitate them continuing to work on, but given they can be on illness benefit for two years, that means they could enhance their record considerably by not working over the age of 66. On balance, it is felt that while the facility should be provided to continue working, and while the facility should be provided to allow people to claim short-term payments in the event of some contingency arising, to allow them to enhance their record considerably and to not only get an increased rate of payment but also an enhanced rate of payment would be a step too far. Consequently, credits are not being facilitated over the age of 66 in those instances.

With regard to foster carers, again, there is a danger of some conflation in this regard. Foster carers are treated in the social welfare system for pension purposes in exactly the same way as any other parent or carer is dealt with and there is no change. It is a universal application of the conditions and, therefore, if somebody is caring or is a parent, there is a whole set of provisions, and those are the provisions that are applied to foster carers presenting for pension payments. They are entitled to the homemaker’s scheme and the disregards for that, and they are entitled to the home caring periods that we spoke about earlier under the TCA scheme. If a foster carer is in receipt of child benefit, that provides the proof that they were caring for a child. If they are not, then Tusla can confirm the caring periods when a foster carer has been doing that work for Tusla. In the event that somebody does not reach the thresholds for a contributory pension, then, exactly the same as with any other parent or carer in the country, the non-contributory system is available to them as well. I think there is enough within the existing system to facilitate foster carers, the same as any other carer.

An Cathaoirleach

I would like to get answers to my questions on the working family payment and head 27.

Mr. Tim Duggan

I will hand over to Mr. Walsh to deal with that.

Mr. Colum Walsh

The working family payment is included. There are a range of benefits that do not necessarily require individual heads and they are linked to whether the person is in insured employment. The changes that we are making in the earlier heads, which mean somebody could continue to work past 66 and up to 70, would provide access to those payments. That is the difference there.

With regard to head 27, it is a very convoluted provision to get to a point, which is that once we head into deferral, somebody will no longer just retire at 66 and they can potentially submit their claim at any point between 66 and 70. One of the things that people do is submit their claims early, for example, they submit them two months in advance. We want to be in a position where if somebody submits a claim early and we know they are going to remain in employment for the next two months, or they are going to remain caring for the next two months, we can build in the assumption of those contributions for the remaining period.

That is it really. It is just to make sure we can provide for that. It is a change that the deferral creates in being able to calculate the contributions that are relevant to the State contributory pension.

An Cathaoirleach

On the age threshold of 66, Mr. Duggan has said there is an actuarial calculation done if someone is getting an enhanced pension beyond their 66th birthday. I presume that this actuarial calculation is only being done on the primary payment and not on any supplementary supports the person would be entitled to. There is a saving to the State as a result of that. Is any calculation being done on the potential saving to the State in terms of those supplementary payments that are being deferred? The example that jumps to mind is the qualified adult allowance, which would not be paid at the age of 66 if it was deferred, potentially to the age of 70. I presume there is no actuarial calculation on that so this is a net saving to the State. Have we any figures on that? The impression has been given that this is all about cost, that it is cost neutral, or that it is a cost to the Exchequer, but there are savings built into this as well if there was a substantial uptake. Have we any idea for the figures on that?

Mr. Tim Duggan

The short answer is "No".

An Cathaoirleach

Am I correct in saying there is a saving?

Mr. Tim Duggan

There would be if a significant number of people deferred. In such circumstances that would be quite a considerable saving but we have not done calculations on that. It is quite difficult to predict what level of take up of deferral there may be.

An Cathaoirleach

I will put it another way. There would be an average cost for everyone that goes into pension payment with regard to supplementary benefits. When the submission is made to the Department of Public Expenditure, National Development Plan Delivery and Reform, up to now the Department of Social Protection knew exactly how many people would reach the threshold of pension age in the next 12 months. There would be an average in the cost of that payment to those persons. The Department would also have an average cost of the supplementary benefits. Could we get the figures for the average cost and the potential savings for one pensioner deferring, over one or 100 or 1,000 people? At least it would give us some indication of the figures we are talking about here, taking into account that it is very hard to know what the uptake will be.

Mr. Tim Duggan

It will be a crude calculation but yes we will.

An Cathaoirleach

Deputy Ó Cuív has a supplementary question.

Deputy Éamon Ó Cuív

I have a question on foster care. If a person is fostering a child he or she can claim a caring credit up to the child's age of 12 but not between the age of 12 and 18? Is that correct?

Mr. Tim Duggan

It is exactly the same, yes.

Deputy Éamon Ó Cuív

This is where the fostering organisations have a very good case. By definition most children who are fostered out have come from difficult backgrounds. There are issues in the background and in a high percentage there are issues with the young people themselves. There is an amount of care and attention required for that child between the ages of 13 to 17, and amount of care and attention required by Tusla for that child is way beyond what one would do for a child who had a much more stable background. There is a case that caring credits would be given for people who foster children, at least up to the child reaching the age of 18.

An Cathaoirleach

In fairness, we have already made that recommendation.

Deputy Éamon Ó Cuív

But now the Bill is in front of us-----

An Cathaoirleach

Yes and we will be incorporating that.

Deputy Éamon Ó Cuív

A lot of very good issues are raised by the Department, and the officials have obviously studied it. I studied it when I got it late last night. We really need to look at all the implications here. Obviously, we want the legislation introduced as fast as possible but we do not want to knock the horse jump in our rush. We have all had the experience of a thing being a long time in the Department and suddenly, the one people who are meant to rush it are the legislators. Rushed legislation can be a disaster. I suggest that we be efficient about this but we take whatever time is necessary to tease out all the valid issues.

An Cathaoirleach

I thank Deputy Ó Cuív. All of us in this room, on the Department side and on the Oireachtas side, understand the social welfare code pretty well. We spent a considerable amount of time talking about a number of hypothetical cases. The argument was made very well on both sides in relation to it. There are implications, however, in some of the alterations with these heads of Bill that could have unintended consequences. Really, the only people who will know this are people who are applying it themselves. Some of the people who are very thorough in relation to the social welfare code are the people who are retired and have a bit of time on their hands. This is why the committee was so anxious to put this out for public submissions, to get and address some of these potential anomalies before they arise. It is not the intention of the Department or the Oireachtas to create any anomalies here. Our fear is that this may arise inadvertently. We are anxious to respond back to the Department as quickly as possible. We will do that as quickly as possible but it may not be by 4 October. It will be as soon as possible thereafter.

Does Mr. Duggan have any supplementary comment?

Deputy Éamon Ó Cuív

I have two small queries to confirm I understood what was said to the Cathaoirleach. If a person defers to whatever date that he or she decides, and does not have to say "I am going to 68 or 70" or whatever, could the person defer at 66 and then cancel that deferral at any time if his or her circumstances change? Will the Department confirm that?

Do I take it there is no actuarial adjustment to the dependant adult allowance? Again, for the next ten or 20 years a lot of people will come to pension age who will be in receipt of the adult dependant allowance. Deferring has consequences and that may make a move less attractive. At that stage a person would be 87 or 88 before he or she catches up. It is only attractive to people who are short of contributions.

An Cathaoirleach

To be quite honest, they are the ones who will benefit disproportionately from this.

Deputy Éamon Ó Cuív

With regard to someone who is short on contributions and the rates are €265 or €260 one would get €6 less, it is a fair risk.

An Cathaoirleach

We know what Deputy Ó Cuív will get into when he eventually retires from here: he will be a pension adviser. Will Mr. Duggan come back on those comments?

Mr. Tim Duggan

Either that or an adviser to those going to Paddy Power.

Deputy Éamon Ó Cuív

I would always say that if there were only two horses in the Galway Races and you asked me for a bet, just do the opposite.

Mr. Tim Duggan

There is no application for deferral. A person does not have to apply to defer. If a person does not draw down his or her State pension then he or she is automatically in deferral. We have decided to put no administrative burden on people there at all. The person has to do nothing and is automatically in deferral. The date the person draws down the State pension is the date the rate will be fixed at. One can apply in April and say "I am retiring in June". Whatever age the person is and whatever the rate is for that age in June is what the person will be paid as a State pension. There is no cancelling anything, I do not think.

Deputy Éamon Ó Cuív

That raises another issue. Someone came to me in the past week. This person is 68 and has never claimed a contributory pension. If this person holds off until the Bill is enacted, could the person then apply for a deferred pension?

Mr. Tim Duggan

One has to be born after 1 January 1958 to avail of deferral. There was a second part to the question.

Deputy Éamon Ó Cuív

Mr. Duggan is not doing an actuarial on the Bill. Mr. Duggan said that, did he not?

Mr. Tim Duggan

That is to be determined. That has not yet been settled.

An Cathaoirleach

It will probably be a recommendation from the committee anyway that that would be included in it.

In terms of the actuarial calculation, as it is set out here in the proposed legislation, for every full year one gets an actuarial calculation. If one does not retire until one's 67th birthday, one will get a form of a top-up. How does that apply to someone who is short contributions? Is it contributions for every week that are calculated up to the 40th full year of contributions? The point I am making is that I, at 67 years of age, having a full record up to my 66th birthday, have to work a full year to get an additional benefit on that. However, if I work to sixty-six and a half, not having had a full PRSI record up to my 66th birthday, is every single week that I work over that six months of benefit to me?

Mr. Tim Duggan

Yes.

An Cathaoirleach

I thank Mr. Duggan for that.

I thank Mr. Duggan, Mr. Walsh and Ms Mannion for their contributions and for their engagement with the committee which will be ongoing as this proposed legislation is passed. I thank them for the answers that they provided to us this morning which give us substantial food for thought.

The committee will now go into private session. Is that agree? Agreed.

The joint committee went into private session at 11.02 a.m. and adjourned at 11.24 a.m. until 9.30 a.m. on Wednesday, 4 October 2023.