PRSI would have to rise to keep the pension age at 66

Taoiseach says his party wants to retain the current retirement age but warns it would cost in terms of PRSI contributions

The Pensions Commission recommended that the age for qualifying for the State pension should be moved upwards but Micheál Martin has raised doubts about that proposal. Stock picture

PRSI contributions will have to rise in the coming years in order to keep the pension age at 66, the Taoiseach has warned.

Micheál Martin said he does not want to see the pension age rise above 66 after the issue was discussed during a special budget-focused meeting of the Fianna Fáil party on Friday.

The Oireachtas committee on social protection proposed that the State pension age should not rise beyond the age of 66 in a report published earlier this year.

However, this was at odds with the report of the Pensions Commission last October, which recommended the retirement age should be set at 66 and three months in 2028, 66 and six months in 2029, and 66 and nine months in 2030, before hitting 67 in 2031.

Speaking after his party's meeting, Mr Martin said: "There was a good discussion on pensions and members of parliament party wanted clarity on the Fianna Fáil position on that, and I made the point that we didn't see the age going beyond 66, but that then would have implications for PRSI increases in the medium term."

It is understood that a number of Fianna Fáil members, including TDs Barry Cowen and Jackie Cahill, as well as Senator Ollie Crowe raised the issue of pension age at the party's meeting on Friday. The Taoiseach said: 

There has to be give and take in respective of either PRSI or the age question, but above all, we have to work with our coalition partners on finalising that whole area.

"There was a clear groundswell within the parliamentary party that they want the pension age retained at 66, but then that has implications for PRSI," he told reporters.

Mr Martin denied the suggestion that he had undercut Social Protection Minister Heather Humphreys who previously said that the current situation in relation to the pension age is not sustainable.

However, no timeline on when a final decision will be made has been set and the Government is now unlikely to make announcement on the controversial issue before the summer recess.

'There was a clear groundswell within the parliamentary party that they want the pension age retained at 66, but then that has implications for PRSI,' Mr Martin said. File picture: Sasko Lazarov/Photocall

It was agreed that Budget 2023 will have to contain a significant cost of living package, including immediate measures, during the lengthy meeting of the Fianna Fáil party in Dublin's Alex hotel.

Minister for Public Expenditure Michael McGrath said one-off cost of living measures are being developed and these will have to be "substantial" and "implemented quickly".

There will also be an emphasis on access to health, addressing the housing crisis as well as education, childcare, disability services and welfare.

It is also expected that a tax package will involve changes to income tax bands to protect lower income workers.

Speaking after the meeting, Mr Martin said: “We have to work out what’s the best way to alleviate the pressures on households in terms of their disposable income and a way that doesn’t further exacerbate the inflationary round.”

He added: "Some key areas identified were around childcare, pensions, and also in terms of mitigating costs for families more generally within education," Mr Martin said.

"Childcare was one that a large number felt we should really do something significant in the Budget."

It is also now expected that the Government will formally announce its decision to bring forward the budget into September after Cabinet meets on Monday.