Thursday, 13 June 2019

Questions (201)

Éamon Ó Cuív

Question:

201. Deputy Éamon Ó Cuív asked the Minister for Employment Affairs and Social Protection when the total contribution system is to be introduced as the sole method by which State pension entitlements are assessed and the averaging system abolished for new applications; when it is planned to amend the law to this effect; the date this change will be effective from; her plans to increase the age at which applicants become eligible for the State pension from the present 66 years of age upwards; when these changes will apply; the details of the new age limits; and if she will make a statement on the matter. [24611/19]

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Written answers (Question to Employment)

The introduction of a Total Contributions Approach (TCA) to establishing the level of entitlement for all new state pension contributory claims was signalled by the then Government in the National Pensions Framework in 2010.  At that time it set a target date of 2020 for the implementation of TCA.  More recently, the Roadmap for Pensions Reform 2018-2023 targeted implementation of the TCA in 2020.  This is subject to the necessary legislation being enacted and supporting structures being in place.   

Consultation is a very important part of the development and design of the new pension.  With this in mind, I launched a public consultation on the design of the TCA on the 28th of May 2018.  The consultation was open for over 3 months and the Department received almost 300 responses from individuals and organisations.  Those submissions outlined the views of respondents on the issues of most interest to them.

Having carefully examined the outputs of the consultation process, my Department is now finalising the design of the scheme and I intend to shortly bring a proposal to Government setting out that design.  When the Government has agreed the approach to be taken, I will initiate the work required to introduce this reform.  This will include a public announcement of the model proposed, and the date it is expected to be effective from.

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).  Under the legislation enacted, 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, helping to make it more feasible for the rate of payment to grow in line with prices and / or average earnings in the future.  

I hope this clarifies the matter for the Deputy.