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 reason for these changes was to make the State pension system more sustainable as life expectancy increases. This is essential, as people who are working now and whose PRSI contributions fund State pension payments will need a State pension when the time comes for them to retire. This demographic change has significant implications for the future costs of the State's pension provision, which are increasing by approximately €1 billion every four to 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 so that the duration of jobseeker's payments will naturally adjust in line with increases in the State pension age.
A person who retires before reaching pension age may qualify for social insurance contribution-based jobseeker's benefit or the means-tested jobseekers allowance if they satisfy the rules of the schemes. Currently, people on jobseekers benefit whose benefit expires on their 65th birthday can generally continue to receive benefits until they reach the pensionable age of 66 years provided that they have paid at least 156 PRSI contribution weeks.
There is no statutory retirement age in Ireland and the age at which employees retire is determined by the employment contract between the employer and the employee. Many such contracts may have been entered into when the retirement age was 65 years and this was in the context of previous State pension arrangements. Employers are legally entitled 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 agree. The Workplace Relations Commission has produced a code of practice on longer working hours and The Irish Human Rights and Equality Commission has also published guidance material for employees and employers who use fixed-term contracts beyond what was the normal retirement age of 65 years. People are living longer and healthier lives and many of them want to continue working after 65 and these resources can facilitate them in their choice.
I trust this clarifies the matter for the Deputy.