Thousands of elderly people will be eligible for better pension payments, Social and Family Affairs Minister Seamus Brennan said today.
The means test for the non-contributory state pension will allow pensioners to have up to €20 of weekly income without incurring deductions, compared to €7.50 previously.
Mr Brennan said the change would allow 34,000 people to move up to higher or full non-contributory pensions.
“That’s a very significant benefit for those people. Before this, they would have had reduced pensions because they had earnings or means,” he said.
Under the new means tests, a pensioner can have up to €35,000 in capital and still qualify for the maximum pension of €182 a week.
Pensioners will also be allowed to earn up to €100 each week in part-time jobs without affecting their pension entitlements, and the old age pension will be re-named as the ’state pension’.
The new Social Welfare Law Reform and Pensions Bill will also phase out a scheme which allowed unemployed workers to retire at 55, change the name of unemployment benefit to the ’jobseekers allowance’ and increase the number of checks and training schemes for those out of work.
Mr Brennan said that with social welfare accounting for nearly one in three of every Government euro spent, the schemes had to tackle the problems faced by the unemployed, lone parents and other groups.
“They all allow people to move to better places, and help them to move on to better places, not just salve our collective consciences by paying the bill like some kind of ATM machine,” he said.
The Pre-Retirement Allowance scheme, which was set up in the 1980s to allow long term-unemployed people over 55 to retire, is to be closed down.
Mr Brennan said it had been wrong to assume that people would never work again once they reached 55.
“They all have a contribution to make and our job is to help them make that contribution, not write them off.”
The 11,000 people scheme will continue to receive payments but its closure to new applicants will lead to an increase of around 2,000 people to the list of unemployed.
Mr Brennan pledged to increase the number of checks to prevent fraudulent claims for the jobseekers allowance and disability benefit (which is to be renamed ’illness benefit’).
“I am determined that we’re tough on fraud because we’re trying to be generous in helping people with payments, activation, supports and encouragement, and allowing them to earn money while they keep their benefits. But the other side of that philosophy is that anyone who defrauds the welfare system is dealt with fairly ruthlessly, because you’re actually taking money from people who need it.”
Mr Brennan announced that the €10,000 tax free allowance for childcarers would be subject to PRSI payments of €253 per year.
He said this was to ensure that childminders would be able to avail of the maternity benefit and pensions available under the social insurance scheme.
There will also be increased powers to deal with companies who are not paying pension contributions on behalf of their workers, particularly those in the construction sector.
The Pensions Board will be allowed to fine companies rather than undertake prosecutions in every case and the Pensions Ombudsman will be allowed to bypass a company’s internal dispute process to investigate a complaint more quickly.
Green Party TD Dan Boyle said that while he welcomed elements of the bill, it was unfortunate that most of the pension proposals were of a technical nature and did not address the problems with portable pensions, the Personal Retirement Savings Accounts (PRSAs).
“The real problem in relation to the pensions issue is the need for proper debate on the cost effectiveness of meeting private pensions’ needs through increasing tax reliefs or, alternatively, providing direct state pension payments that are adequate and linked to average income in the state,” he said.
Mr Boyle said that changing the names of social welfare payments did not constitute reform.
“Real reforms are instead needed to tackle ongoing poverty and welfare traps which this bill has missed the opportunity of addressing,” he said.