Tuesday, 5 March 2013

Questions (269)

Clare Daly

Question:

269. Deputy Clare Daly asked the Minister for Social Protection the reason persons retiring next year at the age of 65 years will have to wait a full year before they are eligible for their pensions; and the action she will take regarding same. [11018/13]

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Written answers (Question to Social)

The State pension (transition) (SPT) is paid for a maximum of 12 months and is currently available to people who retire from work on reaching age 65 provided they satisfy the necessary PRSI contributions. This will change in 2014 as provided for in the Social Welfare and Pensions Act, 2011. SPT will cease to be paid from 2014 which will standardise the payment of State pension at age 66. In addition, the age at which State pension (contributory) (SPC) will be payable will increase to 67 years from 2021 and to 68 years from 2028.

The decision to increase State pension age was taken in the context of changing demographics and the fact that people are living longer and healthier lives. The abolition of SPT removes the retirement condition which acts as an incentive to leave the workforce and has been widely criticised as a barrier to older people remaining in employment. There is no retirement condition attached to SPC. Currently, a person who retires from work on reaching age 65 and who does not have sufficient PRSI contributions to qualify for SPT may apply for another social welfare payment, depending on their individual circumstances. This will remain the case when SPT is abolished in 2014. The State pension is the bedrock of the Irish pension system. These reforms are essential to ensure its sustainability and to address the challenges of changing demographics such as increasing life expectancy. There are no plans to change the date of implementation.