Tuesday, 17 July 2012

Questions (321)

Michael McGrath

Question:

329 Deputy Michael McGrath asked the Minister for Social Protection in respect of the proposed increase in the minimum qualifying State pension age to 68, if she will specify the transitional arrangements that will be in place for persons who may, for example, have a contract of employment which specifies they must retire at 65 or who may have an income continuance plan under which payments cease on reaching the age of 65; and if she will make a statement on the matter. [35093/12]

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Written answers (Question to Minister for Social Protection)

The Deputy will be aware of the sustainability issues regarding pensions in Ireland and the pension reform measures under way to try to address some of these issues including the raising of State pension age which has already been provided for in primary legislation.

While the current State pension age of 66 remains, the State pension (transition) which applies for one year for persons of age 65 will cease from 2014. Thereafter, State pension age will increase to 67 in 2021 and 68 in 2028. A Steering Group, together with a number of subgroups, was established in my Department, to oversee the implementation of pension reforms. The Steering Group has representation from the Department of Jobs, Enterprise and Innovation. Officials of my Department are in on-going discussions with colleagues in the Department of Jobs, Enterprise and Innovation and the Department of Justice and Equality in relation to any implications arising as a result of the increase in State pension age.

A forum on retirement and working is currently being scheduled where these Departments will also engage with the social partners and other interest groups to further consider and identify the range of issues involved.

We will always continue to provide the normal supports to those who cannot, for whatever reason, continue working or find themselves in financial difficulty. In this regard, the Deputy may wish to note that in 2011, almost half of those who received State pension were already on a social welfare payment before they reached pension age. For those who are unable to work past age 65 or for those whose income continuance plans cease at age 65 and who have an income need, Social Welfare schemes will continue to be available for those who fulfil the eligibility criteria.

As Irish society has changed, pensions policy has evolved to reflect these changes. A key focus of mine has been to ensure that the State pension is sustainable in light of demographic changes and the associated increases in pension costs. This challenge is compounded by the wider need for sustainable public finances. Our primary consideration in making the changes we have made to reform pensions has been to ensure that the system is on a financially sound and sustainable footing.