Press release
Minister Humphreys announces major Pension Reform to take effect from 1 January
From Department of Social Protection
Published on
Last updated on
From Department of Social Protection
Published on
Last updated on
The Minister for Social Protection Heather Humphreys has announced that new flexible pension arrangements for people turning age 66 and applying for State Pension (Contributory) are being introduced from 1 January 2024.
This new flexibility allows people to defer claiming the State Pension (Contributory) at age 66 to receive an actuarially adjusted higher payment rate up to age 70.
The change also allows people to improve their social insurance record and potentially increase their rate of State Pension payment when they retire or allow those who started working later in life to make additional contributions to qualify for a State Pension (Contributory).
Commenting on the new flexible State pension, Minister Humphreys 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 from today is the option to delay the date on which people start receiving their State Pension (Contributory).
“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 introduction of flexibility to the State Pension (Contributory) allows a person to defer claiming their State Pension (Contributory) up to the age of 70 and receive an actuarially based increase in their weekly payment rate.
In addition, a person with less than 40 years contributions can use the period between 66 and 70 years of age to build up additional entitlements and, if a person has less than 10 years PRSI reckonable paid contributions, they may be able to use this period to establish entitlement to a State Pension (Contributory).
The measure is being introduced for those who turn 66 from January 2024 therefore, 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 State Pension (Contributory) on reaching age 66 on or after 1 January 2024, the proposed maximum rates for each year of deferral are as follows:
It should be noted that these rates of payment are based on January 2024 rates of State Pension (Contributory) and are subject to change in future budgets.
More information on all the changes to the State Pension (Contributory) can be found at www.gov.ie/pension.