Dáil Éireann Debate, Tuesday - 21 May 2024
386. Deputy Claire Kerrane asked the Minister for Social Protection if she remains committed to meet the formal benchmark target of 34% of average earnings for State pension contributory payments as per the Government's ‘Roadmap for Pensions Reform 2018-2023'; if she has a timeframe to meet this target; and if she will make a statement on the matter. [22518/24]
View answerA Roadmap for Pensions Reform 2018 - 2023 committed to:
(i) set a formal benchmark of 34% of average earnings for State pension contributory payments, and
(ii) Institute a process whereby future changes in pension rates of payment are explicitly linked to changes in the consumer price index and average wages.
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.
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.
Any changes to the State Pensions, both Contributory and non-Contributory would need to be considered in an overall budgetary and policy context.
