What changes are being made to the State pension from January 1?

New changes in the State pension will allow people to remain in work longer and defer claiming their state pension. Stock Image. 

Irish people will now have the option to remain in work until they are 70 in exchange for a higher pension when they retire, according to new changes announced today.

Minister for Social Protection, Heather Humphreys, announced the new flexible pension arrangements for people turning 66 and applying for a state pension, which will be introduced from January 1 onwards.

The new changes allow those eligible to defer claiming their contributory state pension at age 66 and instead claim an adjusted higher payment rate up until they turn 70.

These changes aim to provide people with more choices, allowing them to improve their social insurance records and increase their state pension payments when they retire. 

It also includes adults who started working later in life, giving them the opportunity to work longer in order to qualify for a state pension.

Ms Humphreys said those who wish to claim their state pension at 66 can still do so, adding that the choice varies depending on each individual situation.

 “It may seem like the obvious choice to start receiving your pension payment as soon as you’re eligible, but this won’t be right for everyone. For example, being able to work longer and continuing to pay PRSI gives people the chance to build up contributions and potentially increase their State Pension payment rate. 

"Or you may have entered the workforce later in life and may not have the required contributions to qualify for a pension at 66,” she said.

“These new options will allow you an additional four years to build up social insurance contributions to meet the qualifying criteria, which you wouldn’t previously have had the option to do,” she added.

Based on a person qualifying for the maximum rate of €277.30 state pension on reaching age 66 on or after January 1, 2024, the proposed maximum rates for each year of deferral are as follows:

• €290.30 at age 67
• €304.80 at age 68 
• €320.30 at age 69
• €337.20 at age 70.

These rates of payment are based on January 2024 rates of state pension and are subject to change in future budgets.