State pension system is unsustainable, says Heather Humphreys

Pensions Commission argues age for eligibility should rise to 68 years by 2039

The State pension system is "not sustainable" and there is "no getting away from that fact", Minister for Social Protection Heather Humphreys has said.

Ms Humphreys also said there are “no easy options” when it comes to reforming the State pension.

The Oireachtas Joint Committee on Social Protection, Community and Rural Development and the Islands said in its report, published on Wednesday, that the State pension age should not rise beyond the age of 66.

Its view runs counter to the stance of the Pensions Commission which argued the pension age should rise in steps to 67 by 2031 and then to 68 by 2039.

Ms Humphreys told the Dáil on Thursday that discussions will continue over the coming weeks and the Government will outline its full response to the Commission’s recommendations by the end of March.

“I do appreciate there are concerns out there but let’s not be in any doubt about this, there are no easy options. People are living longer, which is obviously very positive but it does mean there are challenges.

"Today we have 4.5 people working for every one pensioner, by 2050 we will have two people working for every pensioner," Ms Humpreys said.

"The current pension system is not sustainable and there is no getting away from that fact. This is not a problem that's unique to Ireland, countries all over the world are grappling with the same issue."

The minister said the State pension is “the bedrock” of the pension system in Ireland and it is “extremely effective” in ensuring pensioners do not experience poverty.

“This Government is committed to ensuring that this remains the case for current pensioners, those nearing State pension age and today’s young workers including those who are only starting their careers,” she added.

Separately, Ms Humphreys said any decision to enhance the household benefits package would have “budgetary consequences and would have to be considered in the context of budget negotiations”.

She said “despite what some say, we are not removed from reality” and that the Government could see “what’s happening on the ground”.

“We know the cost of living has gone up and that people are struggling to meet some of these costs,” she said.

Fine Gael TD Fergus O'Dowd said many families are making a choice between "buying food or buying fuel", due to rising inflation, adding "that's the absolute reality".

The Louth TD said if a supplementary budget was needed to either increase household benefits or reduce qualification for them , "I think we would all support you in this house because that is the right and proper thing to do in a modern democracy faced with the economic challenges we are facing nationally".

Ms Humprheys was also asked by Sinn Féin TD Rose Conway Walsh whether those in receipt of the carer's allowance would receive the €1,000 Covid-19 bonus for healthcare workers.

In response, Ms Humphreys said the Minister for Health had confirmed that the payment was “ring fenced to certain workers ordinarily onsite in Covid-19 exposed healthcare environments”.

“This payment is a matter for the Minister for Health and is not under the responsibility of my department,” she said.

Ms Humphreys said she had made a number of changes to the carer’s allowance, including increasing the support grant and the weekly payment and reformed the means test and her priority was to ensure the State could provide them a pension.

She said she was aware of the “key role” of carers and in particular the challenges they faced during the pandemic.