Thursday, 30 May 2019

Ceisteanna (8)

John Brady


8. Deputy John Brady asked the Minister for Employment Affairs and Social Protection her plans to extend the duration of jobseeker's payments in line with the increase in pension to 67 years of age; and if she will make a statement on the matter. [23002/19]

Amharc ar fhreagra

Oral answers (7 contributions) (Ceist ar Employment)

Deputy Brady is in luck today, as he is getting to ask a few extra questions.

I am glad to see that we are getting a bit of luck. The pension age will increase to 67 years in 2021 and there are further plans to increase it to 68 years in 2028. In that context, what are the Minister's plans for extending the duration of jobseeker's payments?

The Social Welfare and Pensions Act 2011 provided that the State pension age would increase to age 67 years in 2021 and 68 years in 2028. The purpose of these changes was to make the pension system more sustainable in the context of increasing life expectancy. This has significant implications for the future costs of the State's pension provision, which are increasing by approximately €1 billion every five years.

Social welfare legislation states that jobseeker's payments may be made until a person reaches pensionable age. The legislation also provides that the definition of "pensionable age" will increase as the State pension age increases. In that regard, the duration of jobseeker's payments will naturally adjust in line with increases in the State pension age.

Any person who retires before reaching pension age may apply for social insurance contribution-based jobseeker's benefit or the means-tested jobseeker's allowance, subject to him or her satisfying the rules of the schemes. Arrangements are in place to provide that jobseekers whose benefit claims expire on their 65th birthday can generally continue to receive benefits until they reach the pensionable age of 66 years provided that they satisfy the required contribution conditions.

The plans were introduced with no consultation of any organisation and have had a detrimental impact. The goalposts have changed in terms of the increase in the State pension age to 66 years, 67 years in 2021 and 68 years in 2028. We are moving faster and further than any other OECD country. This has caused serious problems. Due to their employment contracts, some people have been forced to retire at 65 years of age. At that point, they must sign on for jobseeker's payments until they reach 66 years of age. It is done on a nod and a wink. The Intreo offices know that these people will not go out to get a job but that this is all they can do for the year. That situation will grow come 2021 when the pension age increases to 67 years. There are serious problems. People are being forced to retire and move onto jobseeker's payments. We must re-examine the increases in the State pension age.

It must be noted that there is no legally mandated retirement age in the State and I do not think that is true of any other state. The age at which employees in Ireland retire is therefore a matter for the contract between the employer and the employee. While such a contract may have been entered into when the retirement age was 65 years, this is in the context of previous State pension arrangements. There is no legal impediment to any employer or employee agreeing to increase the duration of the employee's employment for either one or two years, depending on when he or she plans to retire, if both parties wish to do so. In that regard, the Workplace Relations Commission has produced a code of practice on exactly this position on longer working hours. The Irish Human Rights and Equality Commission has also published guidance material for employees and employers who use fixed-term contracts beyond what used to be the normal retirement age of 55 years. The reason this was changed - I bow to the wisdom of Deputies who were around before Deputy Brady and I were - is that people are living longer and healthier lives. This is a great thing and we should not diminish it or make it out to be bad. Many people want to work longer in their careers, and we must do whatever we can to help them to do so.

While I agree with the Minister on one thing, that people are living longer, some people want to retire at a certain age and do not want to be forced to continue to work. It is about giving people choice. The Minister may be aware that I introduced legislation a couple of years ago - we are still waiting on a money message for it - to do away with mandatory retirement because it is still in existence and is causing serious problems. The change to the State pension age was brought in with no consultation whatsoever. It is having a huge impact and the Minister knows this. I deal with people week in, week out who are forced to retire at 65 years and to sign on for a jobseeker's payment for the year-long period until they reach State pension age. This period will increase once the State pension age increases to 67 years. The Minister will be aware that recently I introduced legislation to put in place a task force to look at State pension ages and the increases to them. We need to stop the increase in State pension ages. It is causing serious problems. We need serious consultation, which has not happened up to this point, with all the stakeholders to look at all these issues and not to cause serious problems, which is what these issues are doing, for people once they reach State pension age and are ultimately forced onto a jobseeker's payment.

The purpose of raising the State pension age was not to force those people who are 65 years of age or over onto jobseekers' payments. Rather, the then Government - we continue to believe this - sought to encourage workers to remain economically active for longer in recognition of the fact that they are living longer and healthier lives. We wish to promote the implications of their increased life expectancy for personal sustainability. In most cases, it is hoped that workers will continue to work up to the State pension age, and indeed longer if they wish. We all know people who want to continue to work longer and in some cases cannot. As a consequence, we wish to encourage people, through wages or self-employment, to continue to have higher incomes that they would not have if they were to retire and live solely on payments from the Department.

The reason the Deputy's Bill has not been given the green light, or whatever way he wants to put it, is that there is no statutory requirement for retirement in this country. By law, we cannot stop something that is not happening in the first place.