Dáil Éireann Debate, Tuesday - 18 April 2023
867. Deputy Cathal Crowe asked the Minister for Social Protection if pension contributions paid by those in employment over the age of 66 years will be taken into consideration when calculating pensions, in the event of them not having a sufficient number earned prior to reaching 66 years of age; and if she will make a statement on the matter. [16435/23]
View answerCurrently, employees or self-employed workers over State Pension age do not have to pay PRSI on their income. Employers pay 0.5 per cent PRSI (Class J) for employees past State Pension age which provides cover for the Occupational Injuries Benefit scheme only.
In September 2022, I announced a series of landmark reforms to the State Pension system. The measures are in response to the Pensions Commission’s recommendations and represent the biggest ever structural reform of the Irish State Pension system.
One of the key measures is the introduction of a flexible pension system in Ireland from January 2024. Under this new system people will still be able to retire at 66 and draw-down their pension in exactly the same way as they can today. In addition, there will be new flexibility so that people can choose to defer their pension, work longer and receive an actuarially based increase in the weekly payment rate.
The flexible State Pension system is about providing people with choice. People will decide for themselves what best suits their needs and circumstances. For example, in the case of a person who reaches age 66 and does not have sufficient contributions to qualify for a full pension, they will now have the option to work for up to 4 years longer to build up additional entitlements. If a person has less than 10 years PRSI reckonable paid contributions, they may be able to use this period to establish entitlement.
Officials in my Department are currently working on the legislation and systems to support the introduction of this change, which will be effective from January 2024.
I hope this clarifies the matter for the Deputy.
