At the outset, the Deputy may wish to note that the terms and conditions of employment of civil and public servants, including the age at which they may be required to retire, and the public service pension they may qualify for, are the responsibility of my colleague, Mr Brendan Howlin, T.D. Minister for Public Expenditure and Reform.
The Social Welfare and Pensions Act, 2011 provides that State pension age will be increased gradually to 68 years. This began in January 2014 with the standardising of State pension age for all at 66 years and the cessation of State pension transition. The State pension age will increase to 67 years in 2021 and to 68 years in 2028.
I am informed by the Department of Public Expenditure and Reform that the specific compulsory retirement age and minimum pension age provisions which affect an individual public servant will reflect his or her particular employment sector and time of original recruitment. Public servants who must retire at age 65 can draw their public service pension at age 65. The State pension changes have no impact on such persons where they are in the modified social insurance category.
Where alternatively they are in the full social insurance category their public service pensions (and contributions) are, as with many occupational schemes, integrated (or co-ordinated) with social welfare benefits. This means the occupational pension paid is based on the assumption that the pensioner also receives the State pension. The State pension (contributory) entitlement is calculated with reference to the complete PRSI record, including contributions made while working in the public and private sectors.
In the case of retirements of fully insured public servants at age 65, a discretionary supplementary pension may be payable under the rules of the public service scheme to bridge the gap until State Pension commencement at age 66 years. This supplementary pension is only payable where the individual, through no fault of his own or her own, does not qualify for social welfare benefit or qualifies at less than the maximum personal rate. It is therefore necessary to claim the available social welfare benefits in order to receive a supplementary pension.
This situation is not new and already applies to public servants with a retirement age below 65 years.
With regard to the marriage bar, it was a condition of the employment in the public service until 1973 and is the responsibility of the Minister for Public Expenditure and Reform.
However, in general, and similar to many civil and public servants, the social insurance class paid by women affected by the marriage bar was a modified rate (i.e. not the full Class A rate) which gives coverage for widow(er)'s and orphan's pensions, occupational injury benefit, bereavement grant and carer’s benefit only. It did not provide cover for the State pension. The modified rate of social insurance was a condition of employment for public servants at that time. Accordingly, even if those affected by the marriage bar had continued in employment, contributions paid at this class would not have given entitlement to a State pension (contributory) under the social welfare system.
The homemaker scheme, which was introduced in 1994, can make qualification for the State pension (contributory) easier for those who take time out of the workforce for caring duties. The scheme allows up to 20 years spent caring for children under 12 years of age or incapacitated adults to be disregarded when a person's social insurance record is being averaged to determine qualification for the State pension.
The homemaker disregard will not, of itself, qualify a person for a pension. The standard qualifying conditions, which require a person to enter insurance ten years before pension age, pay a minimum of 520 contributions at the correct rate and achieve a yearly average of at least 10 contributions on their record from the time they enter insurance until they reach pension age, must also be satisfied.
If an applicant, with an insurable employment history of full-rate and modified rate occupations, paid their first full-rate contribution prior to 6 April 1991, their date of entry into social insurance is taken as the date of payment of the first (full-rate) contribution. If an applicant has paid their first full-rate contribution on or after 6 April 1991, their date of entry is taken as the date they first commenced paying social insurance, whether at the full or modified rate. This change, which took effect for people who paid their first full rate contribution from 1991 onwards, prevents the situation where some public servants, such as Gardaí or members of the Defence Forces, could retire at 55 and avail of a Public Service pension, and then work for 10 years in the private sector and avail of a full State pension contributory from 65, in addition to the Public Sector pension. The current system which integrates pensions is a more equitable framework.
The State pension is a valuable asset and is based on a system of contributions. Therefore, it is important that entitlement to State pension is based on a substantial contribution to the Social Insurance Fund over a working life.
