Sunday 22 July 2018

More tinkering with pensions is not a solution

The employment minister has taken the first step to righting pension wrongs, but must go a lot further, writes Willie O'Dea

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Stock image

Willie O'Dea

Though few recall it these days, there was once a sitcom on British TV starring the late Joe Lynch, focused on the antics of two quick-witted tailors - one Jewish, one Irish - called Never Mind the Quality, Feel the Width.

It is a title that could be used to describe Minister Regina Doherty's selling of her "solution" to the unfair 2012 pension change brought in by Joan Burton that left more than 40,000 pensioners (mainly, though not exclusively, women) receiving less than others with the same number of contributions, just because of when they turned 66.

Doherty, who is Minister for Employment Affairs and Social Protection, has been acting like the tailor telling the customer that their new handmade coat fits them like a glove while she secretly clasps a clump of excess shoddy material behind their back.

I welcome her U-turn. And though she has not gone nearly as far as I want - and as far as the pensioners concerned need - she has moved further than her predecessor, who had to be dragged kicking and screaming from his previous "nothing to see here" position. But, just as a half-truth is still a whole lie, a problem half fixed is still a problem.

So, having decided to address the problem, why not fully address it and ensure that the same mistakes are not made again when the Government comes to putting a total contributions approach in place from 2020?

It is why I advocate the more straightforward solution of reversing the 2012 changes made by the Fine Gael/Labour Government and getting everyone back on a level playing field. But the minister has set her face against this. Why?

On TV3 recently, Minister Doherty repeatedly said that money was not the problem. Well, if it is not about money, what is her half solution about? Principle?

She seems to argue that her solution is all that is achievable, given the complexity of our pensions system. As an experienced constituency representative handling thousands of pensions cases, I know how complex it is. I also know that much of that complexity is due to the number of quick-fixes that have been applied over the years.

We know that tinkering around with a complex system often raises as many problems as it addresses - that is the lesson of 2012 - so why is it the approach the minister has chosen? She is adding to the complexity, not fixing it. That is why I am so unhappy with what she is doing.

It is also why I am worried that half-fixing the unintended consequences of the 2012 Fine Gael/Labour fix may have further unintended consequences of their own.

And there are more than a few problems with the minister's piecemeal plan, which only commits to actually making the payouts sometime in the first quarter of 2019, despite awarding them from March 30, 2018 onwards.

In other words, she will allow an increase from next March, but pensioners will have to wait a further year to get the hard cash into their hands.

Without an ounce of irony, the minister says the reason for the delay is technology. Isn't technology supposed to speed up processing?

Surely there couldn't be another reason why a politically cynical Government might want thousands of pensioners receiving sizeable arrears payments through the letter boxes early in 2019?

There is also another problem. While her new Home Caring credit will address some of the women's grievances, it will be of little benefit to the many men who were also affected by those same changes. About 40pc of those impacted by the 2012 reduced band rates are men and I am concerned that they will not benefit.

Not only that, but the Government's plan to put a total contributions approach in place from 2020 onwards needs clarity, for those covered by last week's announcement and others, who won't benefit from it, but whose pension entitlements were hurt by things such as the pre-1973 marriage bar.

Getting this spin-obsessed Government to change policy and respond to real-life difficulties is an uphill struggle. Having taken the first steps on the path to righting this wrong, I am at a loss to know why the minister will not finish the journey.

Willie O'Dea is a Fianna Fail TD in Limerick City

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