Thousands of civil servants have been removed from a 'no man's land' where they would be forced to retire at 65 but be unable to claim a pension until a year later.
New rules that were signed into law yesterday mean these workers can continue working until the age of 70 if they wish.
Around 5,000 older people were already caught out, with many forced to sign on the dole and formally pretend they were available for work.
The legislation passed in recent weeks will apply to most public servants recruited before April 2004, other than the designated uniform grades such as gardaí, prison officers, firefighters and members of the Defence Forces.
Amid concerns last year, the Government agreed to rehire some of the civil servants for a period of one year until they qualified for the State pension. This cohort will not be affected by the change in law.
Finance Minister Paschal Donohoe said retirement at 70 would now be compulsory.
"This reflects the fact many wish to remain at work for longer because they feel they have more to contribute to work and to society," he said.