The Government is set to introduce five new rates of payments for pensions that will increase by five per cent for every year a person works.
The plans indicate that the Government plan to keep the state pension age at 66, despite recommendations from the Pensions Commission. But those who remain working after this will be given a bonus for each year they continue to be employed.
Micheal Martin previously said people will still be entitled to a pension at 66, however, they will be given “flexibilities and options” to retire later if they choose.
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He said: “Not everybody (can work beyond 66), for example, certain employments can’t keep going to 70 because the work is just too difficult or too burdensome but there may be other ways of organising workplaces to facilitate people continuing on and using the expertise in a different way."
When will this scheme be put in place?
Minister for Social Protection Heather Humphreys aims to have the new pension system in place by 2024 and it will be paid through PRSI increases.
A ban on mandatory retirement ages will also be introduced to ensure people can take advantage of the new pension system.
Who will receive what?
Those who leave work at 66 will be entitled to the current weekly rate of €253 a week but anyone who remains in work longer will get a higher payment.
The new system will see someone retiring at 67 taking home a weekly State pension of €266. Someone retiring at 68 will receive €281 while those retiring at 69 will get €297. Those who work until the age of 70 will receive €315 per week under the new plan.
Why is this happening?
This decision has been brought in with the hopes of ending the long-time debate on increasing the pension age to 67. These rates are expected to see a major increase in the Budget. Ongoing negotiations hope to see the pension rate jump by at least €10 a week.
What else is being considered?
The Government is reportedly also considering a new scheme for workers who cannot continue working past their early 60s due to the nature of their work. This could see a payment introduced for people such as construction workers who will not be able to work until they are 70.
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