Dáil Éireann Debate, Tuesday - 27 July 2021
1169. Deputy Richard Boyd Barrett asked the Minister for Social Protection the estimated full year cost of ensuring the State contributory and non-contributory pensions are available to all those that reach 65 years of age. [41241/21]
Amharc ar fhreagraReducing the State Pension Age to 65 years would increase pension related expenditure significantly.
Last year my Department estimated the potential cost of introducing such a measure from this year (i.e., from 1 January 2021). Based on that, it is estimated that it would cost €450 million extra in the first year, €845 million extra in the second year, rising to over €1 billion extra in 2025, and this extra cost would continue to rise every year thereafter. The accumulated cost differential for the period 2021-2025 would be over €4.25 billion, i.e., it would cost c.€4.25 billion more than the existing system.
The 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 costings are subject to change in the context of emerging trends and associated revisions of the estimated numbers of recipients.
In February of this year, I introduced the new Benefit Payment for 65 year olds in line with the Programme for Government commitment, to provide a benefit payment for people who are aged 65 and who are required to retire, or who chose to retire, without a requirement to sign on, engage in activation measures or be available for and genuinely seeking work. This new payment is designed specifically to bridge the gap for people who retire from employment or self employment at 65 but who do not qualify for the State Pension until age 66.
The Deputy is aware that the public policy and social issues in relation to funding a sustainable and adequate State pension system are complex. That is why the Programme for Government committed to the establishment of a Commission on Pensions to examine a range of issues including contributions, calculation methods, sustainability, eligibility and intergenerational fairness. That Commission has now completed its deliberations and I expect to receive its report in the near future.
I hope this clarifies the matter for the Deputy.
