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Fresh blow for plans to raise State pension age

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Social Protection Minister Heather Humphreys. Photo: Gareth Chaney/Collins

Social Protection Minister Heather Humphreys. Photo: Gareth Chaney/Collins

Social Protection Minister Heather Humphreys. Photo: Gareth Chaney/Collins

The Government is under growing pressure to reject an increase in the state pension age after an Oireachtas committee recommended it remain at 66.

The age at which people qualify for the state pension was due to rise to 67 last year, but that decision was reversed after it became a major political battleground during the last general election.

The Pensions Commission has recommended the pension age should rise to 67, but not for another number of years.

The state pension age is currently 66. The commission has recommended that this rise by three months a year after 2028, reaching 67 in 2031, before increasing to 68 in 2039.

It said this could be achieved in part by increasing PRSI contributions from 4pc to 11pc for self-employed workers.

However, the Joint Oireachtas Social Protection Committee has come down in favour of the qualifying age remaining at 66.

Its stance will now put further pressure on the Government not to increase the state pension age.

Social Protection Minister Heather Humphreys has previously warned that “very difficult decisions” will have to be made.

The Government set up the Pensions Commission after it scrapped plans legislated for by Fine Gael and Labour in 2011 to increase the retirement age from 66 to 67 from 2021 and to 68 in 2028.

The Programme for Government states that the pension age should remain at 66 and the increase to 67 will be deferred “pending the report of the commission”.

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However, in its report on the controversial issue, the Social Protection Committee said people aged 66 or over cannot be “reasonably” expected to “continue working due to the physical and mental stress that their jobs have caused over many years (sometimes in poor work, health and safety conditions) taking into account the work they are trained for”.

It recommended that there should be “flexibility” to allow those who have 40 years of contributions to receive the state pension by age 65.

Proposals from the Pensions Commission would also see self-employed people bear the brunt initially as they would see their PRSI contributions soar from 4pc to 11pc in the coming year.

The committee advised that these changes should be “implemented gradually”.

It added that employers’ PRSI contribution rates should be examined by the Commission on Taxation to “determine the fairest way” to increase the rates. It believes a proposal to move workers over the age of 66 to Class K PRSI, which would see people over the state pension age paying PRSI, should be rejected.

The committee also recommended a ban on mandatory retirement clauses, which should be applied retrospectively. The Irish Independent previously reported that the committee’s report on the Pensions Commission recommendations, which was due before Christmas, was delayed as members were unable to reach consensus.


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