Dáil Éireann Debate, Tuesday - 9 April 2024
793. Deputy Colm Burke asked the Minister for Social Protection is she will give due consideration to raising the full rate of the State pension (contributory) in order to restore it to its 2020 spending power, as a further step towards benchmarking the rate at 34% of average earnings, which should be achieved by 2026 as a 'living pension' alongside the introduction of the new national living wage; and if she will make a statement on the matter. [14862/24]
View answer795. Deputy Colm Burke asked the Minister for Social Protection if she will consider increasing the maximum rate of the State pension (non-contributory) to bring it to the same level as the State pension (contributory) and benchmark both the contributory and non-contributory State pension against 34% of average earnings, to reduce gender pension inequality; and if she will make a statement on the matter. [14864/24]
View answer796. Deputy Colm Burke asked the Minister for Social Protection if she will take the necessary steps to implement benchmarking and indexing of the State pension and reinforce this by commissioning a comprehensive analysis of the costs associated with ageing, and the cost-of-living for all older people; and if she will make a statement on the matter. [14866/24]
View answerI propose to take Questions Nos. 793, 795 and 796 together.
The Roadmap for Social Inclusion contains a commitment to develop a benchmarking approach for use in adjusting the value of State pension payments. The approach proposed by the Department, known as the smoothed earnings approach, was subsequently endorsed by the Pensions Commission.
Government subsequently decided that the Department of Social Protection would, in submitting budget options, set out a rate of pension payment calculated using the smoothed earnings benchmark approach as an input for consideration as part of overall Budget discussions, on an annual basis.
I can confirm that this calculation was prepared and submitted to Government as part of preparations for Budget 2024. In assessing Budget options, and taking account of this calculation, Government was mindful that the cost of living pressures are most acute over the winter period. For that reason, rather than taking a simplistic approach to applying an indexed rate of increase to weekly rates of payment, the Government decided to 'front-load' supports through the provision of once-off payments, including extra payments for pensioners receiving Fuel Allowance, those in receipt of carer’s payments and those living alone.
These payments were provided in addition, not only to the €12 increase in the weekly payment rate, but to the double week payments delivered in December last and this January.
This combination of once-off payments in conjunction with the €12 weekly rate increase, not only exceeds the value of a benchmarked increase but ensures that a significant proportion of this value is delivered when people need it most over the winter period.
For example, the value of the double payments for a single pensioner is €542.60 – equivalent to over €10 per week from these two payments alone.
Pensioners living alone, and in receipt of Fuel Allowance will have received bonus payments of €500 – equivalent to a value of about a further €10 per week.
In addition, the ESRI post Budget analysis shows that the approach taken by the Government is progressive in nature and that households, including pensioner households, are better off compared to a purely indexed linked approach.
Any changes to the State Pensions, both Contributory and non-Contributory would need to be considered in an overall budgetary and policy context. The smoothed earnings calculation will be assessed in the coming months and submitted for consideration of Government as part of the preparations in advance of Budget 2025.
