Majority of elderly people solely reliant on State payout
THE Government would be better off examining changes in income tax rather than cutting the state pension which the majority of older people are solely reliant on, an Economic and Social Research Institute (ESRI) director said yesterday.
Professor Brendan Whelan, principal investigator of the Irish Longitudinal Study on Ageing (TILDA) -- the most comprehensive study of older people ever conducted in Ireland -- said any cuts would inevitably affect a large group of people.
"Cuts would affect them. The Government could look at the taxation system rather than the level of the pension to claw money back -- not just among PAYE workers, also the self-employed. The trouble is, we have a very serious financial crisis and (the) axe has to fall somewhere," he said when asked to comment on speculation that the old age pension may have to be means tested.
There was another group of older people who were relatively well off and they were a significant minority, he pointed out at a conference in Trinity College outlining the scope of the TILDA study -- the first results of which will be available this time next year.
One of the benefits of the research will be that it will look at people before retirement and those who have retired to see the contrast. "It will document the size in their drop in income. One of the big issues in retirement is the cliff-edge drop. If you are going from an average industrial wage of €600 a week to a pension (of) €200 a week, that is a cliff-edge drop," he added.
The study will give a detailed picture of the population over 50 years providing data for the first time on their health, wealth, living standards, needs and social networks.
Prof Whelan said the representative sample had been selected across the country and so far the take-up had been 50pc although they were aiming for 60pc. "It will help to inform policy. It will look at the connection between income and health status. The richer you are the healthier you are."
Addressing the conference, Health Minister Mary Harney admitted that too often policy had to be decided on without the back-up of evidence and instead drawn up "on the hoof".
Ireland currently has an opportunity to gather valuable data through the study because our population is younger. But its findings will allow this and future governments to plan based on a good state of knowledge.
There would have to be more decisions taken on pension age in the future and she pointed to Greece where people could retire at 55 years on a full pension as something that is unsustainable. Professor Rose Anne Kenny, head of the Department of Medical Gerontology, told the conference that ageing affected more than old people and that was something not given enough consideration.
"It affects the labour market, public finances and competitiveness," she pointed out. The conference was told that by 2030, one in five people resident in Ireland will be 65 years or older.
The greatest increase will be in the over-80s; and of female children born today, more than 50pc are likely to survive to the age of 100 or beyond.
The success in living longer is also one of the country's biggest challenges. It is projected that the proportion of the population aged 65 and older in Ireland will rise to 15pc by 2011 and to 19pc by 2031 .
Ireland's older people are among the least healthy in Europe and the proportion of older Irish people living in income poverty stands at 40pc.