Sunday 17 November 2019

Pensioners will be €168 worse off next year due to inflation

(stock photo)
(stock photo)

Anne-Marie Walsh

Pensioners will be €168 a year worse off due to price hikes next year after failing to get another €5 in the Budget.

The Government's forecasted increase in the cost of living would wipe €3.22 a week - or €168 a year - off the value of the full contributory pension in 2020.

Inflation is set to jump from 0.9pc this year to 1.3pc next year, and 1.4pc in 2021, according to the Government's Economic and Fiscal Statement released on Budget day.

The pension would therefore have to rise by the same amount to keep up with predicted price rises.

Siptu economist Michael Taft said pensioners would need an extra €168 a year added to their payments to keep pace with inflation.

"The failure to, at a minimum, increase weekly payments by the level of price increases means that pensioners - and all those reliant on social protection payments - will suffer a cut in living standards," said Mr Taft, who addressed a Nevin Economic Research Institute seminar on Budget 2020 in Dublin yesterday.

"There is no doubt this will increase poverty.

"This is the logical result of the Government's failure to protect those on the lowest incomes."

He said although there was a €2 a week hike in the fuel allowance and it is paid to many pensioners, not all get it as it is means tested.

However, he said the allowance would not make much of an impact on incomes as it only covers a limited number of weeks over the winter.

Mr Taft said it contrasts sharply with a big tax break for those set to inherit up to €350,000. "It's nice enough if you have that coming down the line," he said.

He called for a supplementary budget if there is an "orderly" Brexit because the Government's calculations were based on a worst case scenario.

Age Action spokesperson Corona Joyce said Budget 2020 eroded the gains that the previous four budgets gave to older people.

"Budget 2020 did not offer the majority of older people the support they need to meet the rising cost of living that is anticipated by the impacts of Brexit and an expected increase in inflation," she said.

"For example a person over 80, not living alone, received €1.08 per week to cope with Brexit, the carbon tax increase and rising cost of living."

Michelle Murphy of Social Justice Ireland said welfare recipients will be left behind if rates don't keep track with increases elsewhere in the economy.

Meanwhile, economist Robert Sweeney of social change think tank, TASC, said tax cuts in recent times have increased the Government's reliance on corporation tax.

Irish Independent

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