The fear of antagonising the grey vote influences the Coalition
The pensions black hole we are continually warned about is about to get darker.
Scarred by the backlash at the last general election, Taoiseach Micheál Martin is drawing a line under the controversy over the increase in the pension age and saying: “Not on my watch.”
The furore dropped out of the sky in 2020 election campaign. Where the parties wanted to talk about the economy and public services, the potential rise in the pension age became a recurring theme on the doorsteps.
In the vacuum of uncertainty came promises of no change and fudges to get it examined by an expert group. Fine Gael and their quasi-government colleagues in Fianna Fáil wanted to get it off the pitch.
Now the experts have come back and the Pensions Commission has recommended the pension age should rise to 67, but not for another number of years, so pushing the issue out to the end of the decade.
The commission has recommended the pension age rise by three months a year after 2028, reaching 67 in 2031, before increasing to 68 in 2039. In the space of a generation, the pension age will have risen by two years.
The pension age hit 66 following a change from 65 back in 2014 as the country emerged from the economic crash. The move was controversial as some 65-year-olds found themselves having to sign on the dole – often for the first time in their working life - to claim Jobseeker’s Benefit to fill the gap between retiring at 65 and getting the State pension at 66.
Under the same plan, the pension age was set to increase to 67 in 2021, and 68 in 2028 under the same plan. That timeline was reversed due to the general election furore.
Now the new timeline is also parked. The Taoiseach has put his boot behind the proposals and kicked to touch.
Fianna Fáil and Fine Gael are falling back on their core vote and the base is becoming increasingly old. The grey vote is not to be messed with.
Martin was a member of the calamitous government which shot the Celtic Tiger.
He’ll remember well the frenzy of October 2008 when there was an attempt to means test the over-70s medical card.
The measure was altered so it was only going to affect those on high incomes but it took off as a cause. The proposal was ditched after a furious crowd of 2,000 pensioners packed into the St Andrew’s Church on Westland Row, just around the corner from Leinster House, where ministers were booed and heckled as they tried to quell the anger.
The grey vote revolt rose up and the politicians backed down. The fear of antagonising older voters remains.
The political power of the grey vote is also being reflected in the clamour between the Coalition parties to claim credit for increasing the State pension in the forthcoming Budget 2023, be it in October or September.
However, the bill for the Taoiseach's latest volte face on the pension age will have to be paid somewhere.
The pensions timebomb continues to tick. Martin openly admits additional PRSI contributions will be needed to ensure the pension age is not increased. To keep the pension age low, the social insurance pot will have to be topped up, which means workers and employers paying more in taxes.
Someone will have to pay the bill and that someone is younger workers who are already burdened by high taxes, high cost-of-living prices and high property prices, meaning many will never own their own home. Meanwhile, a far higher proportion of pensioners will either be homeowners or have stable accommodation.
The generation coming is going to be first in the centenary of the existence of the State to be less well off than those that went before.
A bit like action on climate change, the pension age will become the next generation’s problem, so why bother?