Tuesday, 17 July 2012

Questions (52, 53)

Catherine Murphy


55 Deputy Catherine Murphy asked the Minister for Social Protection if she will provide known the details of any consultations she may have had with the Department of Jobs, Enterprise and Innovation regarding the abolition of the State pension transition; the discussions she had with officials from the Department to the effect that the abolition of the pension entitlement would have an impact on the specific employment rights of persons, specifically with regard to eligibility for redundancy payments from the State; and if she will make a statement on the matter. [34639/12]

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Catherine Murphy


323 Deputy Catherine Murphy asked the Minister for Social Protection the total number of persons aged 65 years and over who have availed of redundancy payments from the State in the past two full calendar years and to date in 2012; the details of any consultations she has had in relation to the forthcoming abolition of the State pension transition; if, in respect of her Department, there are any policy implications in the removal of the support with regard to employment rights; if she anticipates an increase in applications for redundancy support; and if she will make a statement on the matter. [34249/12]

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Written answers (Question to Minister for Social Protection)

I propose to take Questions Nos. 55 and 323 together.

Increasing retirement age was a key question that was considered in a major consultation exercise conducted as part of the preparation work for the Green Paper on Pensions and the National Pensions Framework. Some 380 individuals and almost 70 organisations made written submissions while over 500 people attended consultation events.

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.

I can confirm that 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.

In relation to redundancy, the circumstances in which a person is deemed to have been dismissed by reason of redundancy are very specific and are set out in the Redundancy Payments Acts 1967 to 2011. In addition to liquidation, receivership and bankruptcy of the employer these include: the employer having ceased or intending to cease to carry on the business for which the person was employed; the requirements for work of a particular kind having ceased or diminished or being expected to do so; and the employer having decided to carry on the business with fewer or no employees and therefore re-organising or rationalising.

Subject to these and the other requirements of the scheme, a person aged 65 or over can qualify for a redundancy payment on the same basis as any other person. However, a person who retires from their employment would not be considered to have been made redundant and therefore no increase in applications for redundancy support is expected as a result of the changes to State pension age. So far this year, approximately 740 redundancy payments were awarded to people aged 65 or over but in many of these cases the redundancy would actually have occurred in 2011. Unfortunately, as the scheme has only been operating on the Department of Social Protection's systems since October 2011 it is not possible to extract corresponding figures for 2010 and 2011.

In relation to pension reform, 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 remains adequate and sustainable in light of demographic changes and the associated increases in pension costs.

This is compounded by the wider need for sustainable public finances. So 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.

Because the State pension is the bedrock of the Irish pension system, these reforms are essential to address the challenges of increasing life expectancy and to ensure its sustainability. 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.

For those with an income need, social welfare schemes will continue to be available, for those who fulfil the eligibility criteria.