Written Answers. - Parliamentary Debates - Houses of the Oireachtas

Questions— 14 February 2012. Written Answers
Minister for Social Protection (Deputy Joan Burton): Pensions are a long-term investment
aimed at ensuring that people have an adequate income in retirement. Government policy
supports this aspiration through generous tax reliefs and we are currently reforming the pension
system to ensure its future sustainability.
There are a number of reasons why early withdrawals of pension savings are not permitted,
or desirable, the principal one being that funds, and the associated tax relief on contributions,
are designed to support people in later life to ensure they have an adequate income. This
requires that pensions must be long term vehicles based on the principle that savings will be
“locked away” until retirement.
Allowing access to pension savings before retirement or pension age would be a significant
change to pension policy and the basis of pension savings in Ireland. At the request of the
Economic Management Council (EMC) the issue has been considered in detail by an interdepartmental
ad-hoc group, chaired by my Department. The group concluded that the principle
of pension savings being “locked away” until pension age should be maintained and reported
this to the EMC. The EMC also requested that the report of this group be examined by the
Interdepartmental Group on Mortgage Arrears who also examined the issue of early access to
pensions and did not recommend such an approach.
The idea of allowing people to access their pension savings early to pay off mortgage debt
or to increase their spending power may seem attractive, particularly at the moment. However,
the resulting reduction in pension savings could have significant negative consequences longer
term and in particular, fails to address the group who may be most affected by personal debt
or mortgage arrears. For example, younger people who are most likely to be at risk of mortgage
debt are also the group who have the least amount of pension savings. If their pension scheme
has incurred losses, as many have over the past number of years, early withdrawal of funds
would mean very poor value for money. Where people are close to retirement, an early withdrawal
of funds could significantly diminish the pension they receive as they may not have time
before retirement age to fill the gap left by such a withdrawal. There is no guarantee the funds
could be repaid or that people could make up these losses.
Only 51% of people in employment aged 20 to 69 have pension coverage. This relatively low
rate of pension coverage is a concern. The Programme for Government includes a commitment
to reforming the pension system to progressively achieve universal coverage, with particular
focus on lower-paid workers and so a National Employment Pensions Scheme based on an
automatic enrolment approach is being developed. Allowing people access to their pension
savings before pension age would run totally counter to the policy of encouraging more people
to save more for their retirement.
Accordingly, there are no proposals at present to amend the legislation to provide for early
access to pension funds.
Social Welfare Appeals
298. Deputy John Lyons asked the Minister for Social Protection the position regarding the
domiciliary care allowance appeal in respect of a person (details supplied) in Dublin 9.
[7546/12]
Minister for Social Protection (Deputy Joan Burton): The Social Welfare Appeals Office has
advised me that an appeal by the person concerned was registered in that office on 13th
October 2011. It is a statutory requirement of the appeals process that the relevant Departmental
papers and comments by or on behalf of the Deciding Officer on the grounds of appeal be
sought. These papers were received in the Social Welfare Appeals Office on 3rd January 2012
and the appeal will, in due course, be assigned to an Appeals Officer for consideration.
455