Dáil Éireann Debate, Tuesday - 16 April 2019
539. Deputy Michael McGrath asked the Minister for Employment Affairs and Social Protection the way in which she plans to address the situation where many private sector employees are required by their contract of employment to retire at 65 years of age but cannot access the State pension, contributory, until 66 years of age and rising to 68 years of age over the next number of years; and if she will make a statement on the matter. [17474/19]
View answerAt the outset it should be noted that there is no legally mandated retirement age in the State, and the age at which employees retire is a matter for the contract of employment between them and their employers. While such a contract may have been entered into with a retirement date of 65, in the context of the previous State pension arrangements, there is no legal impediment to the employer and employee agreeing to increase the duration of employment for one or more years, if both parties wish to do so. In this regard, the Workplace Relations Commission has produced a Code of Practice on Longer Working and the Irish Human Rights and Equality Commission (IHREC) has published guidance material for employers on the use of fixed-term contracts beyond normal retirement age.
The purpose of changes to the State pension age is to make the pension system more sustainable in the context of increasing life expectancy. If there is no change in State pension age, the proportion of a person's life spent in retirement will increase to levels where current workers will no longer be able to support current pensioners.
This sustainability is vital, if the current workers, who fund State pension payments through their PRSI, are to receive a pension themselves when they reach retirement age. Therefore, the Social Welfare and Pensions Act 2011 provided that State pension age will be increased gradually to 68 years. This began in January 2014 with the abolition of the State pension (transition) which was available to people aged 65 who had retired and who satisfied the PRSI qualifying conditions. This standardised the State pension age for all at 66 years (it was already 66 for non-contributory pensioners, and for contributory pensioners who worked to 66 or older). This will increase to 67 in 2021 and to 68 in 2028. These changes will assist in maintaining the sustainability of the overall state pension system, and make it more feasible for the rate of payment to grow in line with prices and / or average earnings in the future.
Jobseekers Benefit is payable subject to the person satisfying the general scheme conditions. This entitlement is normally paid for 9 months (234 days) for people with 260 or more PRSI contributions paid and for 6 months (156 days) for people with fewer than 260 PRSI contributions paid. Arrangements are in place to provide that jobseekers whose benefit expires in their 65th year can generally continue to be paid benefit up until pensionable age (currently their 66th birthday) provided they satisfy the necessary contribution conditions. The jobseekers schemes are kept under review and any further changes, including entitlement beyond the 66th year, will be considered in that context.
I hope this clarifies the matter for the Deputy.
