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Pension Provisions

Dáil Éireann Debate, Tuesday - 21 May 2013

Tuesday, 21 May 2013

Questions (401, 402)

Aengus Ó Snodaigh

Question:

401. Deputy Aengus Ó Snodaigh asked the Minister for Social Protection in the case of public servants and other workers who are required to retire due to contract at the age of 65 next year, the social welfare payments they will be able to avail of until they can qualify for the State contributory pension. [23650/13]

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Aengus Ó Snodaigh

Question:

402. Deputy Aengus Ó Snodaigh asked the Minister for Social Protection her plans to address the needs of those public sector workers who will be compelled to retire at 65 years and will not qualify for the State pension until they are 66 years; in the absence of the transitional pension, if those persons will have to apply for a jobseeker's payment. [23651/13]

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Written answers

I propose to take Questions Nos. 401 and 402 together.

The Social Welfare and Pensions Act, 2011 provides that State pension age will be increased gradually to 68 years. This will begin in 2014 with the abolition of the State pension (transition) thereby standardising State pension age for all to 66 years. The State pension age will be further increased to 67 years in 2021 and to 68 years in 2028. These changes apply to all fully insured employees, including some public servants.

Public servants (including civil servants) who are due to retire aged 65 in January 2014 will be able to draw their occupational public service pension at age 65. The changes regarding State pension (transition) will have no impact on public servants (including civil servants) who are on modified social insurance.

However, for those public servants (including civil servants) who are fully insured, their public service pensions (and contributions) are, like many occupational pension schemes, integrated (or co-ordinated) with social welfare benefits. This means the occupational pension paid is based on the assumption that the pensioner also receives the State pension (transition or contributory).

Where this does not happen, a discretionary supplementary pension may be payable under the relevant public service pension scheme to bridge the gap. In this instance, a supplementary pension is only payable where the individual, through no fault of their own, does not qualify for social welfare benefit or qualifies at less than the maximum personal rate. It is therefore necessary to claim any available social welfare benefits in order to receive a supplementary pension. This situation is not new and already applies to public sector workers who have a retirement age below 65.

For other workers, the main social welfare payments available to those who leave employment before pension age are jobseekers benefit and job seekers allowance. Persons aged between 65 and 66 years are generally entitled to receive payment up to the date on which they reach pensionable age (66 years).

It should be noted that until the 1970s, the standard age for receipt of State pension was 70 years of age. Increasing longevity and significant improvements in health status mean that people can work longer to support themselves in retirement. Raising State pension age and the abolition of the State pension (transition) is a necessary step in ensuring the sustainability of pensions into the future. The recently published OECD report on the Review of the Irish Pension System confirms that reforms are necessary if we are to continue to put pension provision on a sustainable footing given the changes in demographics, the deficit in the Social Insurance Fund, and the difficult fiscal situation.

Questions Nos. 403 and 404 withdrawn.
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