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Minister Humphreys announces landmark reform of State Pension System

  • State Pension Age to remain at 66; New ‘flexible’ system to be introduced


  • People to be given the choice to work until age 70 in return for a higher State Pension 


  • State to move to a ‘Total Contributions Approach’, as recommended by the Pension’s Commission


  • Long-term carers to be provided with a pension for the first time


  • Commitment to explore new scheme to support people who cannot continue working in their early sixties 


  • Long-term sustainability of State Pension System to be addressed through gradual, incremental increase in social insurance rates


  • Minister Humphreys: Today represents the biggest ever structural reform to our State Pension System



Minister for Social Protection, Heather Humphreys TD, has today announced a series of landmark reforms to the State Pension system in Ireland.


The measures, which were approved by Cabinet this morning, are in response to the recommendations from the Commission on Pensions.


The set of reforms agreed today include:


  • Maintaining the State Pension Age at 66 and introducing a new flexible pension age model;


  • From January 2024, people will have the option to continue working up until the age of 70 in return for a higher pension;


  • As recommended by the Pensions Commission, move fully to a ‘Total Contributions Approach’ for calculation of individual pensions entitlements on a phased basis over 10 years starting in January 2024;


  • There will be enhanced State Pension provision for long-term carers to be introduced from January 2024.  This will mean, for the first time, people who have to give up work over a long duration to look after a loved-one will have their time spent caring recognised in the pension system’;


  • The Department of Enterprise, Trade and Employment will introduce measures that allow, but do not compel, an employee to stay in employment until the State Pension age;


  • Workers will be provided with access to a PRSI contribution statement service each year in a manner that enables them to understand their entitlements;


  • The long-term sustainability of the State Pension system will be addressed through gradual, incremental increases in social insurance rates over time;


  • The level and rate of increase in social insurance rates will be determined on a structured basis every 5 years informed by the outcome of a statutory actuarial review.


  • A committment to explore the design of a scheme that would modify the current Benefit Payment for 65-year-olds to provide a benefit payment for people who, following a long working life, 40 years or more, are not in a position to remain working in their early 60s;


Following today’s Cabinet meeting, Minister Humphreys said:


The measures agreed by Cabinet today represent the biggest ever structural reform of the Irish State Pension System.


“We know that people are living longer and healthier lives which is hugely positive. At the same time, everybody’s job and circumstances are different so we need to move away from a ‘one size fits all’ approach to the pension age.


“That is why from 2024, Ireland will move to a new ‘flexible pension age’ model, similar to the systems in place in a number of other EU countries.


“Under this new model people will continue to be able to retire and draw their pension at 66 exactly as they can today. In addition, for the first time, people will now be given the choice to continue working beyond 66 in order to receive a higher pension payment.


“This new system will put the power in people’s hands and give them the choice in terms of what best suits their own circumstances.”



Minister Humphreys continued:


“I’m pleased too that Government has agreed to a number of other really important proposals.


“Over the next ten years, as recommended by the Commission on Pensions, we will move to a Total Contributions Approach, ensuring that people’s pension rates are based on the number of years they have worked and paid contributions.


“This will be a crucial step in ensuring our State Pension System is sustainable into the future and will help deliver a more fair and equitable system for our citizens.


“As part of the move to the Total Contributions Approach, we will provide a pension to long-term carers from 2024.


“Given the sacrifice that carers make and the contribution they make to society, I believe it is only appropriate that we should enable them to access the State pension and I am very pleased to get Government support for this proposal.


“I am pleased that Government also supported my proposal to explore the introduction of supports for people who for various reasons cannot continue working into their early 60s. These proposals will be worked on over the coming months and will be modelled on the Benefit Payment for 65 year olds that I introduced following my appointment as Minister for Social Protection.”


Minister Humphreys continued:


“Thankfully due to the strong performance of our economy and record employment, the social insurance fund is expected to have a surplus at the end of this year.


“At the same time, we do need to plan for the future.Accordingly, action is needed to sustain the system.


“That is why Government have today agreed to review social insurance rates in a structured manner. This will be done every 5 years with the level and rate of increase based on the outcome of a statutory actuarial review.”


Minister Humphreys concluded:


The State Pension system is extremely effective at ensuring that our pensioners do not experience poverty.  The decisions taken by Government today will ensure that this remains the case for both current pensioners and today’s young workers – tomorrow’s pensioners. 


"I would like to thank the Chair of the Pensions Commission, Ms Josephine Feehily and all of the Commission members for producing the report that set out the evidence-based options and recommendations for reform.” 





Note to Editor:


The Current State Pension is paid at the rate of €253 per week for people who retire at 66.


Under the proposed flexible model, and based on current payment rates, the five rates are estimated to be as follows:


  • Age 66 - €253
  • Age 67 - €266
  • Age 68 - €281
  • Age 69 - €297
  • Age 70 - €315

Please note these figures are for illustrative purposes only and are based on current pension rates. They do not take account of any budgetary changes prior to the introduction of the flexible pension system in January 2024.

The Pensions Commission was established in November 2020 to examine the sustainability of the State Pension system and the Social Insurance Fund.  The Pensions Commission comprised 11 members and was chaired by Ms. Josephine Feehily. Membership of the Commission included representation of workers, employers, civil society, academics, and those with technical and policy expertise. 

The Pensions Commission’s Report was published on 7th October 2021.  It is a comprehensive and authoritative report based on various analyses of population, labour force and expenditure projections; an examination of international approaches; and responses to an extensive consultation process.   The Pensions Commission’s Report established that the current State Pension system is not sustainable into the future and set out a wide range of recommendations

In the interests both of older people and future generations of older people, Government has taken the time to consider the Pensions Commission’s recommendations very carefully.   There were a series of discussions on the various aspects of the report, its options and recommendations, through the Cabinet Committee structure.  The views of the Joint Committee on Social Protection and the Commission on Taxation and Welfare were also taken into account.