Wednesday 18 October 2017

Burton calls for State pension to be 'doubled'

Welfare benefits to reflect previous salary levels

Social Protection Minister Joan Burton
Social Protection Minister Joan Burton
Daniel McConnell

Daniel McConnell

Social Protection Minister Joan Burton wants to see the State pension doubled and also wants those who lose their jobs to receive benefits reflective of their salaries rather than a basic payment, it has been learnt.

Ms Burton's radical proposals represent the most far reaching reforms of our welfare system in living memory.

This newspaper has learned that under the plans:

* Ms Burton favours the introduction of an income support or income protection system for those who lose their job to get benefits that "reflect their salary levels" rather than a base payment for a "limited time period" – similar to what was the case in Ireland several decades ago.

* She wants the contributory system made available not just to employees but to the self-employed.

* Ms Burton also wants the Irish State pension doubled from €12,000 a year to €24,000, for which people will contribute throughout their working lives. She feels that as more companies are looking to the State to provide benefits, people would contribute as they do currently in private schemes.

* There will be tougher penalties for those caught defrauding or cheating the welfare system.

Under her plans, if someone who was earning a salary of €70,000 a year was made redundant, rather than just receiving an €188-a-week Jobseeker payment, that person would receive benefits that would "reflect" their salary level – for a limited time.

The principle of the system is that during your employment, you would contribute to a State fund. One of the major complaints about the current system is the lack of benefits for self-employed people, but Ms Burton is adamant that they would be included.

In relation to pensions, a similarly contributory system would apply and people would pay into a fund throughout their working life, and would obtain a "much fairer" pension on retirement. It is clear from her plans that Ms Burton wants to include a provision to preclude the State from raiding the fund, as happened with the National Pension Reserve Fund in 2009.

Her social welfare and pension reforms would "take several years to introduce and could only be done when incomes improve", but need to be introduced to tackle "substantial legacy issues" in the benefit system.

Ms Burton has also sought to have major State infrastructural projects hire people who are on the Live Register, especially those in the construction sector, rather than simply taking people who are already in employment.

Key to her plans is the ongoing crackdown on fraud and abuse of the welfare system. While numbers engaging in such activity are small, they undermine the "social solidarity" which is "at the heart of the welfare system".

Since 2006, the annual welfare spend has spiked from €13bn to more than €20bn last year. Ms Burton is under pressure to make further cuts of €440m in the upcoming budget, but she has suggested that she may not be able to make that target.

Irish Independent

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