Sinn Féin has suggested that employers’ social insurance contributions should be raised to fund the costs of reducing the pension age to 65.
“We are going to have to look at PRSI, that is going to have to happen,” the party’s TD Louise O’Reilly said on Wednesday.
Previously the party has suggested increasing the employers’ contribution by 4 per cent, though Fine Gael and Fianna Fáil have warned that the move would hit jobs.
Sinn Féin welcomed the report of an Oireachtas committee published on Wednesday which said that the proposed increases in the pension age from 66 should be cancelled. “We believe that at the age of 65 workers should have a choice, whether to work on . . . or retire on a pension,” Ms O’Reilly said. “The rules and regulations that are set by people who work in offices have to take account of the people who don’t work in offices.”
Pensions Commission
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. The commission’s report is currently being assessed by the Government, which is scheduled to deliver an implementation plan by next month.
But Government sources say that the country has to face the looming question of the affordability of the pension system, with Ministers insisting there are few easy choices to address the inevitable demographic pressures.
Minister for Finance Paschal Donohoe said the Government was likely to make a decision on the State pension age by the end of March.
Government sources said that no decision had yet been made though the political difficulty of the issue is clear. Both Fine Gael and Fianna Fáil reversed their previous position on increasing the pension age during the last election campaign under pressure from the Labour Party and Sinn Féin.
Mr Donohoe said the decision on the State pension age was very important due to the cost implications.
Longer lives
“The only money the Government has is the money that the Government collects from its citizens or borrows in their name in the future,” Mr Donohoe told the RTÉ News at One programme.
He said while it was welcome that people were living longer, at present there were 4.5 workers for every pensioner.
However, by 2050, due to demographic trends, this would fall to just two workers for every State pension holder.
The economic consequences of this could mean “there will be things we will not be able to do”, Mr Donohoe warned.
In the Dáil, Taoiseach Micheál Martin said the Government had “an open mind” when it came to decisions on the pension age.
Mr Martin said there were no easy choices and any proposals must be “fiscally sound”.
Mr Martin said the fact that people were living longer had implications for “pensions, for how we sustain society with longer lives and greater access to healthcare and interventions”.
