| 16.4°C Dublin

Thousands have pensions slashed by €30 per week

THOUSANDS of workers who retire next year will suffer a €30 drop in their weekly state pension because of Budget cutbacks.

From September next year, the pension rate is being cut for many who did not work long enough for a full state pension.

Recipients of the 'lesser' state pension will potentially suffer a weekly payment drop from €225.80 to €196 -- a difference of more than €1,500 over a year.

The pension cut was announced in the Budget but the impact is only becoming clear now.

Those expected to be most affected are women who spent decades out of the workforce to raise their children.

Fianna Fail deputy leader Eamon O Cuiv -- who was previously the Minister for Social Protection -- estimated that it could affect up to 43,000 would-be pensioners in the coming years.

Mr O Cuiv criticised the impact it would have on women, who might have spent 20 rather than 40 years in the workforce.

"I don't think these women realise their dignity is going to be offended because they are going to be dependent on their spouses," he said.

The Government is not changing the conditions required to get a state pension. A person must have made an average of at least 48 PRSI weekly contributions per year in order to qualify for the maximum amount.

Those PRSI workers who did not work for an average of 48 weeks a year get a reduced pension. And from next September the rates will change.

The reduced pension currently ranges from €225.80 to €115.20 per week, but is going to be cut by between €13 and €30 per week.

It means that certain workers retiring before September 1 will get the current rate of €225.80, but many retiring after will get almost €30 less per week.

The cuts will save just €500,000 next year but this will increase to more than €43m per year when it fully kicks in.

However, the 280,000 pensioners currently getting state contributory pensions of up to €230 per week will not be affected in any way.

And it will not affect those currently on means-tested non-contributory pensions of up to €219 per week.

That is why Tanaiste Eamon Gilmore insisted in the Dail yesterday that there had been no cuts in "basic social welfare rates" in the Budget.

"This Government succeeded in bringing in a Budget that does not increase tax on working people and does not cut basic social welfare rates or protect the rich at the expense of the poor," he said.


But the cuts will reduce the state contributory pensions of many people retiring from September 1 next year. It is estimated that around 6,000 women and 13,000 men will qualify for the state contributory pension next year.

The Department of Social Protection last night could not say exactly how many pensioners would be affected, or how many would be hit by the maximum reduction.

There is one option for people whose pension is going to be cut by up to €30 -- they can claim an adult dependant allowance.

But they will have to be means-tested and have income of under €100 per week and the payment of €203 is still €22 less than what the current state pension of €225.80.

Irish Independent