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Social Insurance

Dáil Éireann Debate, Thursday - 25 November 2021

Thursday, 25 November 2021

Questions (12, 67)

Michael Creed

Question:

12. Deputy Michael Creed asked the Minister for Social Protection the approach of her Department to facilitating those pensioners without full social insurance records to increase their retirement provision by enabling them to continue to make PRSI contributions past the State pension age as per commitments in the programme for Government; and if she will make a statement on the matter. [57407/21]

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Brendan Smith

Question:

67. Deputy Brendan Smith asked the Minister for Social Protection if persons who have reached pension age can continue to make PRSI payments to improve their pension entitlements; and if she will make a statement on the matter. [57996/21]

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Oral answers (6 contributions) (Question to Social)

The programme for Government makes a welcome commitment to help people improve their social insurance contributions beyond pension age. What strategy has the Minister put in place to enable that much-needed reform to be implemented?

I propose to take Questions Nos. 12 and 67 together.

The current position is that any paid employment after a person’s 66th birthday is not reckonable for contributory State pension purposes, nor is the employment liable to any PRSI contributions. The Government established the Commission on Pensions in November 2020 to examine the sustainability of the State pension system and the Social Insurance Fund. The commission's report, published on 7 October 2021, sets out a wide range of recommendations, including allowing a person to continue paying PRSI contributions past State pension age to improve their social insurance record for contributory State pension purposes.

The report has been referred to the Joint Committee on Social Protection, Community and Rural Development and the Islands, and to the Commission on Taxation and Welfare for their views. I understand that both the chair of the commission, Ms Josephine Feehily, and the chair of its technical sub-committee, Ms Roma Burke, appeared before the joint committee on 17 November 2021. Officials from my Department also attended that meeting.

In the interests of older people, including future generations of older people, the Government intends to consider the comprehensive and far-reaching recommendations in the commission’s report very carefully and holistically. My officials will work over the coming months to examine each of the recommendations. They will consult across government through the Cabinet committee system. It is important to complete that work before reaching conclusions. I intend to bring a recommended response and implementation plan to Government by the end of March 2022. I hope this brings some clarity to the matter.

I welcome that this important issue has been covered by the Commission on Pensions and referred to the Joint Committee on Social Protection, Community and Rural Development and the Islands. As we all know, people's insurance contributions can be interrupted for a myriad of reasons. A person may take time off to rear a family or care for a family member. In some instances, a person may have had no opportunity to take up employment. Sometimes people emigrated and their insurance contributions were interrupted. Thankfully, in more recent years people have come back to education and learned new skills to take up employment and resume their insurance contributions.

We need flexibility within the social welfare code to ensure that new and emerging trends are catered for. If people wish to work beyond pension age and make a contribution, they should be able to enhance their record to ensure their pension is improved when they finally decide to stop working. We need to move on these types of issues. I have come across many people whose insurance contribution record was interrupted. They had never relied on the State for assistance and were often hard-working people who did not have the opportunity to remain in employment.

The issues the Deputy mentioned are among those the Commission on Pensions considered. It has set out comprehensive and far-reaching recommendations. All the recommendations were unanimously agreed by the commission, with the exception of the increase in the State pension age. The member nominated by ICTU disagreed with this. The recommendations can be broken into three broad interrelated groupings, covering many of the issues the Deputy has raised. The recommendations to make the system fairer include linking employment contractual retirement age to the State pension age; enhanced pension provision for long-term carers in excess of 20 years, a matter we discussed earlier; the option to retire at 65 for those with 45 years of PRSI contributions; and the option to defer retirement to receive actuarial increased pension rates. As the Deputy said, some of them may be able to work on and pay their contributions or to continue paying PRSI to improve their social insurance record.

I welcome the Minister's commitment to advance these necessary reforms, which are generally for people who have contributed to society and want to ensure they have a decent pension when they decide to cease employment. I sincerely hope these new measures and reforms can be introduced in a realistic timeframe.

The Government is committed to bringing the recommendations in the report of the Commission on Pensions to the Government. I will bring a response and recommended implementation plan to government by the end of March 2022. I am also progressing the issue of auto-enrolment, another aspect we have committed to introducing during the term of this Government. Much work can be done to improve the situation for people when they retire. I thank the Deputy for raising the matter with me.

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