An increase in national insurance contributions is in store for thousands of workers from January 1, the Labour Party said today.

It explained that hidden deep in the decisions taken as part of the pension reform in 2006 was a provision which affected all those who were born after January 1, 1962 and earned more than €17,116.

It had been decided that in order for these people to qualify for a full pension, they must pay national insurance for 40 years, and not 30 years as had been the case before. Their pension would be calculated on the average income in the last 10 years, instead of the best three years in the last 10. At the same time, the retirement age rose to 65 from 61.

The PL said it was probable that the average income over the last 10 years would be less than the best three years out of the last 10. However the maximum pensionable income was to rise from €16,208 to €20,964, meaning a higher pension.

What had not been said, the PL explained, was that those who earned more than €17,116 would pay higher national insurance and this would continue to rise every two years.

From next year, a person aged under 48 earning €354 per week would see national insurance rise to a maximum of €35.39 per week.

Today, those who earned €20,964 paid €1,681 in national insurance. In three years’ time, this would rise to €2,096, or €415 more per year.

The same increase would be imposed on employers.

The party asked if the government had included such increases in its own Budget.