State Pension Age and Entitlement Reforms (2022–2024)

Policy Change: A comprehensive reform of the State Pension system, following the 2020 Pension Commission’s recommendations, was approved by Cabinet in September 2022. Minister for Social Protection Heather Humphreys called it the “biggest ever structural reform” of the Irish State pension system (A new era for the state pension | Addleshaw Goddard LLP). The changes center on keeping the pension age at 66 while introducing flexibility and new qualification rules.

• Flexible Pension Age: State pension age remains at 66, but from January 2024, people can defer claiming their State Pension up to age 70 in exchange for higher weekly payments (A new era for the state pension | Addleshaw Goddard LLP). For example, the weekly rate (currently €253 at age 66) rises to €266 at 67, €281 at 68, up to €315 at 70 (A new era for the state pension | Addleshaw Goddard LLP). This rewards those who choose to work longer. Minister Humphreys said this flexibility recognizes that “one size fits all” no longer works and gives people more choice in planning retirement (A new era for the state pension | Addleshaw Goddard LLP).

• Total Contributions Approach (TCA): A phased move to a new calculation method for the State Pension was announced. Starting January 2024, Ireland began a 10-year transition to a “Total Contributions Approach” for determining pension entitlement (Pension age stays at 66, carers included in new reforms - Downing Courtney & Larkin). Under TCA, the pension will be based on the total years of PRSI contributions made, replacing the old “yearly average” method. This change aims to be fairer, since under the current system some could qualify for a full pension with as few as 10 years of contributions (International Update, October 2022). In practice, those applying for the State pension in coming years (born 1959 or later) will have their rate calculated under TCA (with transitional arrangements using whichever formula benefits them) (Applying for the State Pension (Contributory)).

• Credits for Long-Term Carers: Improved State Pension access for long-term family carers is being implemented. From 1 January 2024, individuals who spent over 20 years caring full-time for incapacitated dependents can receive credited contributions (called “Long-Term Carer’s Contributions”) towards the State Pension (gov.ie - Minister Humphreys announces major improvements in pensions for carers) (gov.ie - Minister Humphreys announces major improvements in pensions for carers). This reform – the first of its kind – helps many lifelong carers (mostly women) qualify for a contributory pension or a higher rate when they reach retirement age (gov.ie - Minister Humphreys announces major improvements in pensions for carers) (gov.ie - Minister Humphreys announces major improvements in pensions for carers). Thousands of carers are expected to benefit in coming years as gaps in their PRSI records due to caregiving are filled by these credits (gov.ie - Minister Humphreys announces major improvements in pensions for carers) (gov.ie - Minister Humphreys announces major improvements in pensions for carers). Minister Humphreys hailed this measure as a historic recognition of carers’ contributions to society (gov.ie - Minister Humphreys announces major improvements in pensions for carers).

• No Increase in Pension Age (with Future Review): Notably, the reform package halted the previously legislated rise in the State pension age. It will remain at 66 (the planned increase to 67 in 2021 was scrapped) (Pension age stays at 66, carers included in new reforms - Downing Courtney & Larkin). The public had strongly opposed raising the age during the 2020 election, and the government heeded that verdict (Pension age stays at 66, carers included in new reforms - Downing Courtney & Larkin). Instead of an immediate age hike, the focus is on long-term sustainability: the Commission suggested gradually raising the qualifying age after 2030, but for the next five years retirees can plan on age 66 as the State pension starting point. The new flexibility means one can still retire at 66 or choose to work a few years more for a larger pension.

• Funding and Early Retirement Supports: To fund the State pension system as people live longer, social insurance (PRSI) contribution rates will gradually increase over time (International Update, October 2022). The Minister indicated any PRSI rises will be “modest” and phased in slowly, given Ireland’s improving finances (Pension age stays at 66, carers included in new reforms - Downing Courtney & Larkin). Additionally, the government will explore an early retirement benefit for those with very long work histories who cannot continue in physically demanding jobs into their early 60s (Pension age stays at 66, carers included in new reforms - Downing Courtney & Larkin). (Currently, a special benefit exists at age 65 for those who retire early, and this may be expanded.) These steps aim to balance financial sustainability with fairness for those retiring at different ages.

Impact for Near-Retirees: If you plan to retire in the next five years, these reforms provide more certainty and choice. Crucially, the State Pension will still be available from age 66, so your retirement timeline need not change. You also have new options – if you wish to keep working past 66, you can receive a higher State pension by deferring it for a few years (A new era for the state pension | Addleshaw Goddard LLP). Someone retiring at 70 could get roughly 24% more weekly pension than at 66 (A new era for the state pension | Addleshaw Goddard LLP). Those who took time out of work to care for loved ones should check if they qualify for the new caregiver credits, as these can help them reach the contribution requirements for a full pension (gov.ie - Minister Humphreys announces major improvements in pensions for carers) (gov.ie - Minister Humphreys announces major improvements in pensions for carers). Overall, the changes aim to ensure the State pension remains adequate and sustainable, so that people retiring now and in the coming years can count on it in the long term. The government has emphasized that these reforms put “power in people’s hands” to decide their retirement age while securing the pension system’s future (A new era for the state pension | Addleshaw Goddard LLP).

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