Tuesday, 5 February 2019

Ceisteanna (619)

Willie O'Dea

Ceist:

619. Deputy Willie O'Dea asked the Minister for Employment Affairs and Social Protection her plans to address the situation of those that are forced to retire at 65 years of age but cannot now receive their entitlement to a State pension until aged 67; and if she will make a statement on the matter. [5282/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Employment)

It is well known that people are living for much longer. This is very positive. As a result of this demographic change, the number of State pension recipients is increasing year on year. This has significant implications for the future costs of State pension provision which are currently increasing by approximately €1 billion every 5 years.

The purpose of changes to the State pension age is to make the pension system more sustainable in the context of increasing life expectancy. This sustainability is vital, if the current workers, who fund State pension payments through their PRSI, are to receive a pension themselves when they reach retirement age. Therefore, the Social Welfare and Pensions Act 2011 provided that State pension age will be increased gradually to 68 years. This began in January 2014 with the abolition of the State pension (transition) which was available to people aged 65 who satisfied the qualifying conditions. This measure standardised the State pension age for all at 66 years. This will increase to 67 in 2021 and to 68 in 2028.

In most cases, it is hoped that workers will continue to work up to State pension age. Where this is not possible and a person exits the workforce before reaching State pension age they may apply for either the jobseeker’s benefit or jobseeker’s allowance schemes. Jobseeker’s payments are currently paid to eligible jobseekers aged 18 to 66 years.

Jobseekers Benefit is payable subject to the person satisfying the general scheme conditions. This entitlement is normally paid for 9 months (234 days) for people with 260 or more PRSI contributions paid and for 6 months (156 days) for people with fewer than 260 PRSI contributions paid. Arrangements are in place to provide that jobseekers whose benefit expires in their 65th year can generally continue to be paid benefit up until pensionable age (66 years) provided they satisfy the necessary contribution conditions. The jobseekers schemes are kept under review and any further changes, including entitlement beyond the 66th year, will be considered in that context.

It is important to note that there is no legally mandated retirement age in the State, and the age at which employees retire is a matter for the contract of employment between them and their employers. While such a contract may have been entered into with a retirement date of 65, in the context of the previous State pension arrangements, there is no legal impediment to the employer and employee agreeing to increase the duration of employment for one or more years, if both parties wish to do so. In this regard, the Workplace Relations Commission has produced a Code of Practice on Longer Working and the Irish Human Rights and Equality Commission (IHREC) has published guidance material for employers on the use of fixed-term contracts beyond normal retirement age.

I hope this clarifies the matter for the Deputy.