New pension arrangements which allow people the choice to work until they are 70 in return for higher payments will be introduced from January 1st, Minister for Social Protection Heather Humphreys has said.
The state pension age will remain at 66.
This new system allows people entitled to claim the pension to defer and receive an adjusted higher payment rate for up to four years.
Ms Humphreys said the change allows people to improve their social insurance record and potentially increase their rate of pension payment when they retire or allow those who started working later in life to make additional contributions to qualify for a state pension.
Providing more choice
She said: “The main aim of this change is to provide people with more choice.
“Those who wish to get their State Pension (Contributory) at age 66 can still do so. They also still have the option of continuing to work.
“What’s new is the option to delay the date on which people start receiving their State Pension (Contributory).”
She added: “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.
“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.
“And, deferring your pension date to fall between 67 and 70 may result in an enhanced rate of payment if that’s what you want to do.”
The measure is being introduced for those who turn 66 from January 2024. The first people to be eligible for a higher rate will be those who turn 67 in January 2025.
Based on a person qualifying for the maximum rate of €277.30 pension on reaching age 66 on or after January 1st, the proposed maximum rates for each year of deferral are: €290.30 at age 67; €304.80 at age 68; €320.30 at age 69 and €337.20 at age 70.
These rates are subject to change in future budgets.
By Jonathan McCambridge, PA & Beat News
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