The Progressive Democrats have pledged to introduce a special pension account whereby the State would contribute one euro for every two contributed by the individual.
In its Security and Dignitypolicy document on older people's issues published today, the party said the Special Pension Incentive Account (SPIA) was an "imaginative" proposal to deal with the so-called "pension time-bomb".
The scheme would provide people on lower and middle incomes with increased incentive to provide for later life, Minister for Health Mary Harney said.
"About 11 per cent of our population in Ireland is over the age of 65. By European standards we have a relatively young population. In Germany, it's 27 per cent. In the UK, it's nearly 19 per cent," Ms Harney said.
The scheme would be available to all those earning up to twice average industrial earnings (currently €66,400) regardless of their tax liability. It would take the place of other pension tax relief and contribution limes would be in line with those available under the current tax relief scheme, the party said.
The party also repeated its pledge to increase the basic state pension to €300 per week by 2012.
It would also introduce an option whereby people could defer receipt of their State pension in return for higher payments in later years, in recognition that many people over 65 wish to continue working on either a whole or part-time basis.
The PDs said the pensions policy was set in the context of increased life expectancy, where men retiring can expect to live on average a further 16 years and women a further 23 years.
Ms Harney also said the party, in government, would establish an Ombudsman for Older People, modelled on the office of the Ombudsman for Children. This would provide a "focused, statutory office to be an advocate for older people, as well as providing a dedicated service for redress beyond existing organisation".
Ms Harney said the there would be 5,000 individually prepared homecare packages in place for individuals throughout the State by the end of the year.
"We have greatly enhanced the home-help services for example and we are providing more community supports by way of therapists in the community to assist older people to remain at home."
Ms Harney said it was planned to put in place 500 primary care teams by the end of the lifetime of the next government. These would be GP-led and would incorporate the services of specialist nurses, occupational therapists, speech and language therapists and chiropodists, for example.
Ms Harney said legislation coming into force next January would make long-term care affordable for everyone without it having to be means tested.
"We have believed for some time that now is the appropriate time in Ireland to put in place supports for older people, both at a personal, individual and family level, but also at a community level."
The Minister added: "International evidence suggests that about 4 and a half to 5 per cent of older people require institutional residential care.
"In Ireland we have that number in residential care, but about a third of those could have remained at home if in the past at the time the care decision was made there were supports in the community."
The PDs also said they would establish a scheme to alleviate the burden of waste charges for older people.