Donohoe says decision on State pension age could be made by March

Taoiseach says there are no ‘easy choices’ and any solutions must be ‘fiscally sound’

The Government is likely to make a decision on the State pension age by the end of March, Minister for Finance Paschal Donohoe has said.

He was speaking on Wednesday after the Oireachtas Committee on Social Protection recommended maintaining the qualifying age for the State pension at 66, and to introduce legislation to ban mandatory retirement clauses in employee contracts.

This recommendation runs counter to the stance of the Pensions Commission which said the pension age should rise incrementally to 67 by 2031, and then to 68 by 2039.

The commission’s report is currently being assessed by Government.


Mr Donohoe said the decision on the State pension age was very important due to the cost implications.

"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 RTÉ News at One programme.

He said while it was a 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.

Asked about the recommendation by the Oireachtas Committee that mandatory retirement be stopped, Mr Donohoe said this suggestion had merit.

Some people enjoyed working and if they worked longer that would help State funding of other projects.

However, the Minister said working beyond the age of 66 might not be possible for all workers, especially those who did manual labour.

Meanwhile, Taoiseach Micheál Martin has said the Government has “an open mind” when it comes to decisions on the pension age.

Mr Martin said there were no easy choices and any proposals must be “fiscally sound”.

Speaking during Leaders’ Questions in the Dáil on Wednesday, Mr Martin said the fact that people were living longer which had implications for “pensions, for how we sustain society with longer lives and greater access to healthcare and interventions”.

Mr Martin said he would support legislation that banned any mandatory clauses on retirement, adding “people should be able to continue to work as long as they wish and that is their choice”.

He said policies that guarantee and sustain pensions into the future must be the core objective of the House.

Labour TD Brendan Howlin told the Dáil Covid-19 has changed "the way we look at work, our attitude of work, location, flexibility, the nature of work itself".

“So it should change our attitude to even our fixed policies in relation to pensions, pension age and so on,” he said.

The Wexford TD described the recommendations as " landmark" and "clearly at odds" with those of the Pension Commission last October.

“One of the most important recommendations is that we should now build flexibility into our pension system to allow those with 40 years of contributions to access the state pensions at the age of 65,” he added. - Additional reporting: PA