Tuesday, 26 November 2019

Ceisteanna (483)

John Brady

Ceist:

483. Deputy John Brady asked the Minister for Employment Affairs and Social Protection the estimated cost of reinstating the transition State pension in each of the years 2020 to 2026. [48850/19]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Employment)

The purpose of changes to the State pension age is to make the pension system more sustainable in the context of increasing life expectancy. If there is no change in State pension age, the proportion of a person's life spent in retirement will increase to levels where current workers will no longer be able to support current pensioners.

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 had retired and who satisfied the PRSI qualifying conditions. This measure standardised the State pension age for all at 66 years. This is in keeping with similar measures being employed by most EU and OECD countries.

My Department's current estimate is that the net annual cost of restoring the State pension (Transition) would be €150.5m including PRSI foregone and secondary benefits. Thus the high level estimated cost for the period 2020 - 2026 would be well over €1 Billion.

I hope this clarifies the matter for the Deputy.