Wednesday, 23 October 2013

Questions (120, 121)

Sandra McLellan

Question:

120. Deputy Sandra McLellan asked the Minister for Social Protection her views on the forthcoming abolition of the transition State pension; the ramifications it will have for those who reach the age of 65 years during 2014 and who will consequently be forced to apply for jobseeker's benefit or allowance and the attendant fall in outcome which will come about as a result of same; if she has considered the potential impact in terms of poverty among the elderly; and her plans to reconsider this change in policy or otherwise to avoid a fall in income for the elderly. [44926/13]

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Sandra McLellan

Question:

121. Deputy Sandra McLellan asked the Minister for Social Protection if her attention has been drawn to any implications of the forthcoming abolition of the transition State pension on the Equal Status Act, or any other equality legislation, in view of the fact that those who turn 65 during 2014 will be forced to apply for jobseeker's benefit or allowance, in spite of the fact that most contracts of employment state that the normal retirement age shall be 65, and that they are often unlikely to be in a position to affect this position. [44927/13]

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Written answers (Question to Social)

I propose to take Questions Nos. 120 and 121 together.

Increasing State pension age and the abolition of the State pension (transition) are steps that have been taken to ensure the sustainability of pensions into the future. The decision to reform State pension was taken in the context of changing demographics and the fact that people are living longer and healthier lives. 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 standardising of State pension age for all at 66 years and the cessation of State pension (transition). The State pension age will then increase to 67 years in 2021 and to 68 years in 2028.

It should be noted that until the 1970s, the standard age for receipt of State pension was 70 years of age. This applied at a time when longevity was much lower and working patterns were more likely to be physically demanding. State pension (transition) was introduced in 1970 when it was known as the retirement pension and was designed to bridge the gap between the standard social welfare pension age, which at that time was 70 years of age, and retirement age. Over time, the age for State pension (contributory) was reduced to 66 years.

However, the Deputy may wish to note that a significant number of people coming on to State pension (transition) in 2012 did not come from work as many were already on other social welfare schemes. In December 2012 there were approximately 14,400 State pension (transition) claims in payment and of those, 12.5 per cent came from work with over 50 per cent coming from other social welfare schemes such as illness benefit, jobseekers benefit and assistance, invalidity and carers, indicating that significant numbers of people are leaving the workforce for a variety of reasons well in advance of State pension age.

In terms of social welfare supports available to those at age 65, all short term social welfare schemes are payable to age 66. The main social welfare payment available to those who leave employment before pension age is jobseeker's benefit. Persons who qualify for a jobseeker's benefit who are aged between 65 and 66 years are generally entitled to receive payment up to the date on which they reach pensionable age (66 years). Each application for any social welfare scheme is assessed on its own merit in terms of qualifying criteria and contribution history. Where a person fails to meet the qualifying conditions of an insurance based scheme, a means tested assistance payment may be available provided they satisfy the qualifying conditions including a means test. Further consideration is being given to the social welfare position of those exiting the workforce before pension age.

It should be noted there is no statutory compulsory retirement age for employees in Ireland. Responsibility for setting retirement age is a matter for the employer/employee relationship and the contract of employment. However, the Court of Justice of the European Union (CJEU) has made rulings in a series of age-discrimination cases concerning Directive 2000/78/EC, which prohibit work-related discrimination on various grounds, including age. The CJEU has clarified that mandatory retirement ages may be set down by employers within the context of national law, whether by contract, custom and practice or other means, which must be objectively and reasonably justified by a legitimate social policy aim, with the means of achieving that aim being both appropriate and necessary. Consideration of these issues as they relate to enterprise and equality policy come within the respective remit of the Minster for Jobs, Enterprise and Innovation and the Minister for Justice and Equality.

An interdepartmental Working and Retirement Group was initiated to consider the cross departmental policy issues that will support longer working and thereby improve the sustainability and adequacy of pensions systems. The interdepartmental group, chaired by the Department of Social Protection, includes representatives from the Departments of Jobs, Enterprise and Innovation; Justice and Equality; Public Expenditure and Reform; and the Pensions Board. Further engagement has also been undertaken with the Department of Education and Skills and the Department of Health and Children and work in this regard is ongoing.