Thousands of public service workers are entitled to a transitional pension to offset potential financial losses from the increase in the state pension qualification age under a deal negotiated in 1995, it has emerged.

Since 2014, their private sector counterparts have been forced to apply for Jobseekers Benefit in an attempt to plug the retirement income gap before the state pension kicks in.

The revelation is set to fuel anger about pension entitlements, which has emerged as a key political issue in the election campaign.

Until 2014 most people retired at 65, and were entitled to their state pension at that age.

But from 2014, workers could only access the state pension from 66. By next year the qualifying age will be 67, and in 2028 it will rise to 68.

With many workers still contractually obliged to quit work at 65, they must now apply for Jobseekers Benefit to plug some of the income gap.

However, it has now emerged that following public service pension reforms in 1995, government employees recruited between then and 2012 can avail of a supplementary pension to offset the potential delay in receiving the state pension.

This was to ensure that this cohort of public servants would not be worse off than their pre-1995 colleagues in terms of their retirement entitlements.

The Department of Public Expenditure and Reform has denied that the State subsidises public sector retirees through a supplementary pension arrangement established in 1995.

In a statement, the Department stresses that the supplementary pension is not a social welfare payment, but rather part of the provisions of occupational pension scheme arrangements put in place in that year.

It says the arrangement for the payment of supplementary pensions "has always existed" for fully insured public servants - so that the State could ensure that the level of pensions payment complied with pensions legislation while protecting the exchequer.

Around 120,000 government employees recruited since 2013 - around a third of the public service - are covered by a new career averaging scheme with no provision for supplementary occupational pension arrangements. 

It stresses that the supplementary pension is not a "top-up" to the pension entitlements provided for in legislation. 

The Department also stresses that the supplementary pension is only payable provided certain criteria are met, including that the individual is not in paid employment, and has engaged with the Department of Employment Affairs and Social Protection to avail of any social welfare entitlements. 

It also says that a Statutory Instrument regarding pensions signed by former Minister Brendan Howlin in 2014 did not alter any provisions which were already in existence, and was intended to facilitate consistency in the drafting and making of public service pension schemes. 

Meanwhile, in a statement tonight, election candidate for Meath East and Minister for Employment Affairs and Social Protection, Regina Doherty confirmed that Fine Gael's proposed new Transition Pension will be introduced for those who retire at 66.

She said "I can confirm that this new transition pension will be paid at a rate equivalent to the Contributory State Pension. This change provides financial certainty to people retiring at 66."

Pension experts have said that this deal insulates that cohort of state employees from the financial loss caused by the pension reforms, while private sector workers continue to lose out and are forced onto social welfare.

The General Secretary of the Irish Congress of Trade Unions Patricia King said that 65% of private sector workers have no second tier occupational pensions at all and are completely dependent on the state pension.

She noted that with the pension qualification age set to rise to 67 next January, single people were losing out on around €45 per week, with even greater losses for those with dependents.

She said Congress had repeatedly pointed this out but that the government had failed to listen.

Ms King accepted it was important that the Social Insurance Fund should be sustainable to deliver pension entitlements - but criticised the government for extending social welfare benefits to self-employed people, and failing to address shortfalls in contributions due to bogus self employment. 

Fianna Fáil leader Micheál Martin called for pension equity for all workers - adding that his party would introduce a transition pension payment for anyone reading the age of 65 to ensure they did not have to go on the dole or avail of social welfare to get an income.

But the Minister for Finance, Public Expenditure and Reform Paschal Donohoe urged caution.

He said that while acknowledging the concerns of workers, the government also had to ensure they got the balance right and had money available in future to pay Ireland's growing number of pensioners the pensions they expect.

This evening, Fine Gael leader Leo Varadkar said the party plans to publish details for a proposed pension transition payment - for anyone forced to retire before the new retirement age of 67 - by the end of this week.

Speaking in Adare, Co Limerick, Mr Varadkar said the party is currently working on costing the policy.

"What people are saying to us on the doors and on the streets, what our candidates are saying back to us, is that there is an anomaly, there are people who are required by their contracts to retire at 65 or 66 before the new retirement age and they don't want to have to sign on.

"We hear that, we get that, we accept that is a problem so we're working on a proposal to put in place a form of state transition pension that means that people will, in those circumstances, be able to get their pension early."

Asked if the payment would be the same amount as the state pension, he replied: "That's the plan, but like I say I don't make policy on the hoof, so what we're doing now is working on the details of that and the costings of that, as to how it can be done."

Sinn Féin is promising to bring the state pension qualification age back to 65.

Party leader Mary Lou McDonald has said she is not surprised that public service workers are entitled to pension subsidies to offset the losses from the increase in the state pension qualification age.

She said the whole system is full of contradictions and anomalies and that its "gravely unfair" that one section of workers would be "left out in the cold".

Ms McDonald said she would challenge the other parties to stop dodging the issue that workers should be entitled to a state pension at 65.

Labour Leader Brendan Howlin, who was Minister for Public Expenditure and Reform in 2014 when the controversial change in the state pension qualification age was introduced, stressed that the Supplementary Pension Scheme for public servants had been introduced in 1995 "...when new entrants to the public service began paying PRSI and their occupational pensions were integrated with the State contributory pension, at a time when some public servants could retire between the ages of 60 and 65".

He said the 2014 Statutory Instrument signed during his tenure was to ensure uniform implementation of the 1995 Scheme across the public service and did not introduce any new payment.

He also stated: "As only 25 years have passed since its introduction in 1995, and public servants can now work up to the age of 70, it is likely very few, if any have availed of it."