Up to 30,000 people who are set to turn 65 over the next 12 months could be forced to claim unemployment benefit for two years as a result of changes being applied to the age at which someone qualifies for the statutory pension, it has been claimed.
At present, the qualifying age for the public pension is 66, having changed from 65 in 2014. That will change, via further seven-yearly updates, to 67 in 2021, and 68 in 2028.
The Irish Association of Pension Funds (IAPF) said the situation, which will see thousands of workers “forced to join the dole queue”, is “highly concerning”. The estimate of 30,000 workers passing age 65 in 2020 is derived from an actuarial report on the State pension, the IAPF said.
IAPF chief executive Jerry Moriarty described the expectation that those turning 65 this year must apply for jobseekers’ benefits as “nothing short of an insult”.
The Department of Employment Affairs and Social Protection, when asked to comment on the opinions expressed by the IAPF, said that the current approach to the pension age dates from 2007, and is “related to the issue of sustainability”.
“Any pension system, be it public or private, must be able to absorb the impact of population ageing without becoming financially destabilised,” a spokesperson told the Irish Examiner.
They added that the future costs of the State’s pension provision are currently increasing by roughly €1bn every five years, while there is no requirement for those aged 62 and greater to engage with the welfare activation process.
“A group, who will have contributed to both the Irish tax take and the Irish economy for over 40 years should not have to face this prospect after a lifetime of work,” said Mr Moriarty, adding that “there is still time to rectify matters”.
He said the association would be asking the Government to consider two actions that would avoid a situation in which those “who warrant and deserve a State pension in the coming year” must wait until 2022 to access it.
Those moves are the introduction of a reduced pension for retirees who need or wish to retire before they reach the new pension age, and a staged phasing in of the changes that will become applicable next year in order to “avoid the cliff edge”.
The decision to raise the statutory retirement age is fundamentally attributable to both Ireland’s ageing population, and its lengthier lifespan.
However, the IAPF said that this blanket approach is “devoid of fairness”.
The association said that, together with forcing people to claim jobseekers’ benefits unwillingly, the approach also fails to make allowance for those retiring due to their inability to do manual work and would further have a “disproportionate impact on poorer people”.
This, they said, is because statistically those of lesser means experience higher mortality rates, and thus “receive even less in total State pension payments”.
While there is no one-size-fits-all retirement age in the private sector, as technically a person cannot be forced to retire at 65, many employees continue to have such a prescribed age in their contract of employment.
Mr Moriarty said the current State approach to the retirement age also ignores “practical issues”, such as a cap on holiday length of two weeks for those accessing welfare and the fact that jobseekers’ benefit is both designed for another purpose entirely from that of pension benefits and also amounts to yearly payments in total of about €2,500 less than statutory pension entitlements.
At present jobseekers’ benefit amounts €203 per week for qualifying adults, versus the State pension total of €248.30 per week.
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