People can choose to work up to 70 under reformed pension system

The State Pension Age is to remain at 66, but people will be given the choice to work until age 70 in return for a higher State Pension under a new system announced today.

The age requirements are just some of a suite of measures included in Minister Heather Humphreys reform of the State Pension System.

The Minister for Social Protection described her new scheme as “the biggest ever structural reform of the Irish State Pension System".

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

The new scheme also acts on the the Pensions Commission's recommendation to move fully to a ‘Total Contributions Approach’ for calculation of individual pensions entitlements on a phased basis over 10 years starting in January 2024.

Another notable provision is the enhanced State Pension provision for long-term carers to be introduced from January 2024. This will mean that 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 measures agreed by Cabinet today represent the biggest ever structural reform of the Irish State Pension System," said Minister Humphreys.

“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: “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.“