Claire Kerrane
Ceist:817. Deputy Claire Kerrane asked the Minister for Employment Affairs and Social Protection the estimated full-year cost of maintaining the State pension retirement age at 66. [20014/20]
Amharc ar fhreagraThursday, 30 July 2020
Ceisteanna (817)
Freagraí scríofa
The public policy and social issues in relation to funding a sustainable and adequate State pension system are complex. Therefore, the Government is establishing a Commission on Pensions to examine a range of issues including contributions, calculation methods, sustainability, eligibility and intergenerational fairness.
The Terms of Reference for the Commission on Pensions are currently being developed and options for its membership are being considered. Proposals will be brought to Government in that regard as soon as possible. It is anticipated that the Commission will be considering submissions from a wide range of stakeholders, including key NGOs in the area.
Once it has concluded its deliberations, the Commission will report to Government by June of next year. In the meantime, pending its report and decisions taken on its recommendations, this Government has clearly stated that the state pension age will remain at 66 years and will not be increased to 67 in January 2021 as currently legislated for. This will require amendment to primary legislation and the Government will bring the necessary legislation before the Oireachtas later this year.
Based on modelling conducted earlier this year, the Department’s best current estimate for the additional net costs per annum of not increasing State Pension Age in 2021 range from c. €180 million in 2021 (due to a first year effect) to an average of over €400 million per annum thereafter, with this increasing every year. These estimates are for net costs and take into consideration additional increases or reductions arising in PRSI receipts, movements from other social welfare schemes, and secondary benefit entitlements including Free Travel, Fuel Allowance, Household Benefit Payment and Telephone Allowance. The estimates are based on current rates of payments and do not make any provision for rate increases. It should be noted that these estimates are subject to change in the context of emerging trends and associated revisions of the estimated numbers of recipients.
The cost of these estimates would be expected to double from 2028, should the State Pension Age not increase to 68, as is currently legislated for, effective 1st January 2028.
I hope this clarifies the matter for the Deputy.