Bríd Smith
Question:1239. Deputy Bríd Smith asked the Minister for Social Protection the estimated cost in a full year of raising the maximum contributory and non-contributory pension payment to €350 per week. [40596/22]
View answerTuesday, 26 July 2022
Questions (1239, 1240)
Bríd Smith
Question:1240. Deputy Bríd Smith asked the Minister for Social Protection the estimated cost in a full year or removing all current bands for the contributory and non-contributory pension schemes and placing all applicants on one band at €350 per week. [40597/22]
View answerWritten answers
I propose to take Questions Nos. 1239 and 1240 together.
The estimated additional cost in a full year of raising State Pension payment rates to €350 per week is €4.19 billion. In calculating this figure, the Revised Estimates for Public Services 2022 (REV) were used as the baseline, which provide a more up to date estimate and reflect legislative changes in relation to the State Pension Age in the Social Welfare Act 2020. The estimate also includes provision for:
- Increasing all maximum rate State Pension payments to the €350 per week rate;
- Increasing all reduced rate State Pension payments to the €350 per week rate;
- Proportionate increase costing for Qualified Adults (IQAs) ;
- Child Dependent Allowance (CDA) being paid at the full weekly rate.
Please see more detail of calculation in the table below.
|
Scheme |
2022 REV Estimate |
Total Cost for Recipient and QA at €350 pw and IQC at Full Rate |
Difference |
|
€000 |
€000 |
€000 |
|
|
State Pension (Contributory) |
6,384,493 |
9,437,302 |
3,052,809 |
|
State Pension (Non- Contributory) |
1,072,683 |
1,655,450 |
582,767 |
|
Widow’s, Widower’s or Surviving Civil Partner’s (Contributory) Pension |
1,654,386 |
2,208,472 |
554,086 |
|
Totals |
9,111,562 |
13,301,224 |
4,189,662 |
The estimated additional expenditure of €4.19 Billion is for one full year only (2022) and takes no account of increased costs anticipated in the future due to well known demographic issues in respect of the future pensioner population. Clearly, introducing one band for State Pensions at €350 per week would be very expensive and would require either considerable additional revenues, or, if introduced on a cost-neutral basis, very significant diversion of funds from elsewhere. The cost implications could only be considered while taking account of the overall budgetary context and the availability of financial resources.
I hope this clarifies the matter for the Deputy.
Question No. 1240 answered with Question No. 1239.