Tuesday, 25 June 2019

Questions (712)

Seán Sherlock


712. Deputy Sean Sherlock asked the Minister for Employment Affairs and Social Protection the entitlements that will accrue for workers who must retire at 65 years in each of the years 2019 to 2021 and who will not reach 67 years of age in 2021, who are not eligible for a State pension in 2021; and if they will have to sign on for a jobseeker's payment for more than one year. [26549/19]

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Written answers (Question to Employment)

It is well known that people are living for much longer. As a result of this demographic change, the number of State pension recipients is increasing year on year. This has significant implications for the future costs of State pension provision which, arising from these demographic changes alone, are currently increasing by approximately €1 billion every 4 to 5 years.

The purpose of changes to the State pension age is to make the pension system more sustainable in the context of increasing life expectancy. 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 will increase to 67 in 2021 and to 68 in 2028.

In most cases, it is hoped that workers will continue to work up to State pension age, and so the question of claiming a social protection payment would not arise. Where this is not possible and a person loses their employment before reaching State pension age, they may apply for either the jobseeker’s benefit or jobseeker’s allowance schemes. Jobseeker’s payments are currently paid to eligible jobseekers aged 18 to 66 years subject to the person satisfying the general scheme conditions. Social Welfare legislation states that jobseeker payments may be made until the person reaches pensionable age. In this regard, the duration of jobseeker's payments will naturally adjust in line with increases in state pension age.

Jobseeker's Benefit 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 provided they satisfy the necessary contribution conditions.

It is important to note 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.

I hope this clarifies the matter for the Deputy.