Dáil Éireann Debate, Tuesday - 21 February 2017
41. Deputy Thomas P. Broughan asked the Minister for Social Protection the cost of reversing the changes to PRSI pension bands from 2012; the cost of backdating this change to the 36,000 plus recipients of the State pension; and if he will make a statement on the matter. [8370/17]
View answer45. Deputy Catherine Murphy asked the Minister for Social Protection if consideration has been given to a request by an organisation (details supplied) for the changes made to the pension system in budget 2012 to be rolled back and for those persons affected to have their payments backdated to 2012; and if he will make a statement on the matter. [8450/17]
View answerI propose to take Questions Nos. 41 and 45 together.
The overall concern in recent years has been to protect the value of weekly social welfare rates. Expenditure on pensions is approximately €7 billion per annum. Due to demographic changes, my Department’s spending on older people is increasing year on year at an approximate rate of €1 billion every 5 years. Maintaining the rate of the State pension and other payments is critical in protecting people from poverty.
It is estimated that reverting the contributory pension rate bands, to the percentages effective from 2000-2012, would cost €60 million next year, and this annual cost would rise at a rate of approximately €10 million per annum. If such a change was introduced, it would mainly benefit pensioners with additional income above the State pension, and not those solely dependent upon it. It would also significantly reduce the funds available for across-the-board pension increases, which were instead introduced in the 2016 and 2017 Budgets, and which benefit all pensioners, including the most vulnerable.
Reforms and increases in the pension age have safeguarded the pension system and its core rates, despite huge demographic pressures and the economic crisis. By achieving this, even in such difficult circumstances, the Government has shown its commitment to supporting older people, as evidenced by CSO figures which show pensioners far less likely to experience consistent poverty than the general population.
Where someone does not qualify for a full rate contributory pension, they may qualify for an alternative payment. If their spouse has a contributory pension, they may qualify for an Increase for a Qualified Adult amounting up to 90% of a full rate pension. Alternatively, they may qualify for a means-tested State pension (non-contributory), which amounts up to 95% of the maximum contributory rate.
I hope this clarifies the matter for the Deputies.
