Higher pension if you retire by the age of 67? A new plan can reward work later in life

Those who work until age 67 are entitled to a higher state pension than those who retire at 66, with plans under government review.

The new proposals would financially reward people who retire later, paying them a higher weekly pension rate while the state retirement age remains at 66.

Social Protection Secretary Heather Humphreys met with Green Party leader Eamon Ryan this week to discuss the issue.

She has also previously met with Tánaiste Leo Varadkar and Minister for Public Expenditure and Reform Michael McGrath to discuss the issue.

Senior government officials from a number of departments also met yesterday. However, sources said discussions are still in the early stages and “a lot of work” still needs to be done.

Under the proposals, the “benchmark” state pension would remain at 66, but people who worked until age 67 would be in line for a higher pension.

It is not clear at this point how much higher that amount would be per week.

It is understood that for those retiring at 67 or over, the higher amount will be “actuarially adjusted” to reflect the extra years of service.

However, government officials fear a political backlash to such proposals, which many within the coalition see as controversial.

Senior figures fear they could be accused of raising the state retirement age to 67 through the back door.

The state retirement age was set to be raised to 67 in January last year, before the government halted the change.

And Taoiseach Micheál Martin pledged last week that the state retirement age would not rise above 66, even if it meant small PRSI increases.

The new proposals are seen as a compromise between Fianna Fáil and Fine Gael. Many Fianna Fáil TDs see the state retirement age – and keeping it at 66 – as a tough issue that will determine the party’s survival.

Sources said the proposals make sense, although they emphasized that discussions are still at an early stage.

The move comes amid calls from Fine Gael for “flexibility” on retirement ages, with some seeking to move away from a set retirement age.

The proposals are not part of the Pension Commission’s recommendations that the state pension age should be raised to 67, but not for any further number of years.

Many in Fine Gael blame the party’s stance on pensions for the loss of 12 seats. In the party’s 2020 election manifesto, she pushed for transitional payments – to close the gap between retirement age and retirement age – for those retiring at 65 and 66.

While government sources backed Ms Humphreys’ comments on the need for “flexibility” as the party’s stance on pensions now, some TDs and senators spoke to the Irish Independent could not say the party position.

Long-term caregivers over the age of 20 are also eligible for the state contributory pension. For nurses who could not make the minimum contribution figure of 520 contributions, the state would make contributions retrospectively.

This was a recommendation in the report of the pension commission.

Fianna Fáil is understood to be particularly interested in this measure.

A government decision on the Pensions Commission report has been long-awaited and originally expected last April.

A senior source said the Department of Social Protection took into account the preliminary analysis of the 2022 census when compiling work on the report’s findings.

It is now likely that the government will make a formal decision after the summer recess in the autumn.

Ms Humphreys said this week it would be a few months before an announcement would be made.

https://www.independent.ie/business/personal-finance/pensions/bigger-pension-if-you-wait-until-67-to-retire-new-plan-may-reward-working-later-in-life-41826501.html Higher pension if you retire by the age of 67? A new plan can reward work later in life

Fry Electronics Team

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