Dáil Éireann Debate, Tuesday - 7 October 2025
345. Deputy Ken O'Flynn asked the Minister for Social Protection to outline the alternative fiscal strategies available to address long-term pension costs without raising the retirement age, such as increasing PRSI contributions or broadening the contribution base. [53105/25]
Amharc ar fhreagraMy Department is acutely aware of the progressive increases in pension costs, particularly in relation to the funding of State pensions, which is one of the main drivers of the long term sustainability issues facing the Social Insurance Fund. This is mainly due to the challenge Ireland will face in relation to demographics, particularly the ageing of our population.
The previous Government established the Pensions Commission in November 2020 to examine the sustainability of the State Pension system and the Social Insurance Fund in light of the projected demographic changes.
The Commission's Report, which was published in October 2021, took account of an assessment of various analyses of population, labour force and expenditure projections and set out recommendations to address the sustainability of the State pension system. The Commission’s report included a range of recommendations for addressing the increase in costs including the gradual increase in the State pension age, increases in social insurance contribution rates and exchequer contributions.
Independently of the work carried out by the Pensions Commission, my Department assesses all factors relating to the State Pension system and its sustainability under the Actuarial Review of the Social Insurance Fund - from which the State pension (contributory) is paid. The Actuarial Review must be conducted every five years, with the most recent Review being published in March 2023. A consistent finding of the Actuarial Reviews is that the Fund will experience significant long term sustainability challenges due to Ireland's changing demographics, the ageing of our population and the decreasing pensioner support ratio (the ratio between the number of older people and the number of working age people).
In order to address the sustainability of the Social Insurance Fund, the previous Government decided not to increase the State pension age but instead to implement a series of gradual and incremental increases in PRSI rates across all three contributors to the Social Insurance Fund - employees, employers and the self-employed. These increases total 0.7 percentage points between 2024 and 2028, with increases after that point to be considered based on the most up-to-date data available from the next Actuarial Review of the Social Insurance Fund.
The next Actuarial Review will consider the sustainability of the Social Insurance Fund, including the projected numbers of older people qualifying for State pension (contributory) and the required increases in PRSI rates to support this expenditure.
I trust this clarifies the matter for the Deputy.
