Dáil Éireann Debate, Wednesday - 24 June 2026
217. Deputy Carol Nolan asked the Minister for Social Protection if his Department has identified the minimum demographic data required to assess the long term sustainability of means tested welfare schemes; whether the absence of foreign born and qualified adult data undermines this assessment; and if he will make a statement on the matter. [47974/26]
View answerThe purpose of means testing for certain social welfare payments is to ensure that State resources are targeted towards those with the greatest need for income supports. Means-tested schemes are demand lead, and so largely determined by demographic and the prevailing labour market conditions.
The recent ESRI publication, Social transfer utilisation among migrants and Irish-born in Ireland, examined the fiscal impact of immigration to Ireland over the period 2014-2024. The study found that immigrants make a higher net fiscal contribution than Irish-born people, and fully finance their share of public services. The analysis found that this higher rate of contribution is mainly driven by higher rates of participation in the labour market amongst immigrants than Irish people. The study further found that were generally no significant difference in rates of receipt of social welfare payments and any differences that did exist were small.
Ireland faces significant demographic challenges in the medium term. While higher than the EU average, Ireland's fertility rate is declining, and the proportion of the population who are older is increasing. This will result in increased pressures on public finances, in areas beyond just social protection. The old-age dependency ratio measures the number of older people relative to the number of working age people. In 2022, Ireland's old-age dependency ratio was around 4:1, or four working age people for every older person. Under the CSO's central migration scenario, this is projected to drop to 2:1 by 2057. Under the CSO's low migration scenario, Ireland is projected to hit the 2:1 ratio by 2042, while under the high migration scenario, the ratio is projected to be marginally above 2:1 by 2057. Immigrants are, on average, younger than Irish people, and have higher rates of labour force participation. This helps to boost income tax revenue and off-set some of the demographic pressures facing the State.
Nevertheless, the demographic challenges we are facing are real, and action is required sooner rather than later to further off-set these challenges. The establishment of NAERSA in late 2025 and the launch of MyFutureFund in January this year were significant milestones to address the pensions gap coverage arising from these demographic changes, and will help working-age persons today save towards their retirement in the future.
Lastly, expenditure relating to the Department’s social insurance schemes is paid from the Social Insurance Fund. The Social Insurance Fund is financed through Pay-Related-Social Insurance (PRSI) contributions. The number of non-Irish nationals constituting to the Social Insurance Fund has been increasing over time, from approximately 785,000 non-Irish contributors in 2019 to just under 950,000 in 2023.
The Department commissions an actuarial review to assess the long-term sustainability of the Social Insurance Fund every five years. The next such actuarial review will be carried out in 2027. The review will project PRSI receipts and scheme expenditure on the basis of the latest demographic projections, including the projected levels of net migration over the period of the review.
