Minister for Social Protection, Heather Humphreys TD, has today announced a series of reforms to the State Pension system in Ireland.
The measures, which were approved by Cabinet this morning, are in response to the recommendations from the Commission on Pensions.
The set of reforms agreed today include:
- Maintaining the State Pension Age at 66 and introducing a new flexible pension age model;
- From January 2024, people will have the option to continue working up until the age of 70 in return for a higher pension;
- As recommended by the Pensions Commission, move fully to a ‘Total Contributions Approach’ for calculation of individual pensions entitlements on a phased basis over 10 years starting in January 2024;
- There will be enhanced State Pension provision for long-term carers to be introduced from January 2024. This will mean, for the first time, people who have to give up work over a long duration to look after a loved-one will have their time spent caring recognised in the pension system’;
- The Department of Enterprise, Trade and Employment will introduce measures that allow, but do not compel, an employee to stay in employment until the State Pension age;
- Workers will be provided with access to a PRSI contribution statement service each year in a manner that enables them to understand their entitlements;
- The long-term sustainability of the State Pension system will be addressed through gradual, incremental increases in social insurance rates over time;
- The level and rate of increase in social insurance rates will be determined on a structured basis every 5 years informed by the outcome of a statutory actuarial review.
- A committment to explore the design of a scheme that would modify the current Benefit Payment for 65-year-olds to provide a benefit payment for people who, following a long working life, 40 years or more, are not in a position to remain working in their early 60s.
Following today’s Cabinet meeting, Minister Humphreys said: “The measures agreed by Cabinet today represent the biggest ever structural reform of the Irish State Pension System.
“We know that people are living longer and healthier lives which is hugely positive. At the same time, everybody’s job and circumstances are different so we need to move away from a ‘one size fits all’ approach to the pension age.
“Under this new model people will continue to be able to retire and draw their pension at 66 exactly as they can today. In addition, for the first time, people will now be given the choice to continue working beyond 66 in order to receive a higher pension payment.
“This new system will put the power in people’s hands and give them the choice in terms of what best suits their own circumstances.”