Richard Boyd Barrett
Question:1170. Deputy Richard Boyd Barrett asked the Minister for Social Protection the estimated full year cost of reinstating the transitionary pension. [41242/21]
View answerTuesday, 27 July 2021
Questions (1170)
Written answers
When the State Pension (Transition) existed, it was a scheme which allowed those who were retired to get a transitionary payment between the ages of 65 and 66 years. The maximum personal rate was equivalent to the then maximum rate for the State Pension (Contributory). Eligibility was based on PRSI contributions and credits.
It is important to note that the conditions and eligibility requirements for State Pension (Transition) were different to those for the State Pension (Contributory). For example, a person had to have a minimum average of 24 contributions per annum to be eligible for the previous model of State Pension (Transition) whereas an average of 10 contributions per annum is required for State Pension (Contributory) eligibility. In addition, recipients of the previous model of State Pension (Transition) were not eligible for secondary schemes such as Free Travel, the Household Benefits Package (electricity, gas, TV licence) or Living Alone Allowance.
My Department’s best current estimate for the gross cost of reintroducing State Pension (Transition), on the same basis as it previously operated, is €293 million for a full year. It is expected that these costs would be offset by savings of some €166 million on Working Age Schemes, arising from recipients transferring from these schemes to State Pension (Transition), giving a net cost of €127 million each year. These figures are based on current payment rates and are likely to increase over time in line with demographic changes. It should be noted that these costs could increase substantially if a State Pension (Transition) was introduced with reduced qualifying criteria or greater secondary scheme eligibility.
In February of this year, I introduced the new Benefit Payment for 65 year olds in line with the Programme for Government commitment, to provide a benefit payment for people who are aged 65 and who are required to retire, or who chose to retire, without a requirement to sign on, engage in activation measures or be available for and genuinely seeking work. This new payment is designed specifically to bridge the gap for people who retire from employment or self employment at 65 but who do not qualify for the State Pension until age 66.
I trust this clarifies the matter for the Deputy.