WORKERS FACE the prospect of spending up to three years in retirement without the State pension under the National Pension Framework unveiled by the Government.
The framework announced plans to abolish the State Pension (Transition) paid to retiring workers in 2014. That will leave retired employees without State pension support until the Contributory State Pension kicks in at 66.
In 2021, that State pension will not be paid until the age of 67 and, from 2028, it will be paid only at the age of 68. The State pension provides income of up to €230.30 a week for people who have paid PRSI contributions through their working lives.
Minister for Social and Family Affairs Mary Hanafin said yesterday that a gap between retirement and receipt of the State pension was not unusual.
“It actually happens at the moment,” she said, noting that some people currently retired at the age of 60. “You have people who go, either from occupational pensions or perhaps the construction industry. They go early but they don’t get the State pension until they are 66.”
Ms Hanafin said people would have an opportunity to plan for how they would bridge the gap financially. “Because the [State pension age of] 67 is only for people who have another 10 years or more to work and the 68 [State pension threshold] is for people who are 49 years old or younger, it is actually going to allow people that lead-in time,” she said.
However, Ms Hanafin said the implementation body would work to ensure people were not at a disadvantage. “There are other social welfare payments that people can lock into that will support them if they have any difficulty,” she said.
She also said the implementation body would be consulting various groups involved in the issue.
The Minister was speaking at the national conference of the Money Advice and Budgeting Service (Mabs) where she was formally launching keepingyourhome.ie, a website providing information for people worried about mortgage or rent arrears and the prospect of losing their home.
Employers yesterday said it was likely they would try to hold on to existing contractual provisions which, by and large, stipulate that private sector workers retire at 65.
The extension of the State pension age “will put pressure on employers to keep people on,” said Ibec director of industrial relations Brendan McGinty.
“Employers would be quite within their rights to say that you must go at 65. Employers have put these contractual arrangements in place for good reason.”
A spokesman for the Irish Congress of Trade Unions said it appeared that much of the framework “had not been thought through”.