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Funding state pensions must not become onerous burden on workers



Social Protection Minister Heather Humphreys

Social Protection Minister Heather Humphreys

Social Protection Minister Heather Humphreys

Adecent state pension is the least a civilised society should offer those who have worked hard and contributed their entire lives.

Any spotlight on the problem of achieving financial security invariably returns to the fact Ireland has an increasing number of senior citizens as a proportion of the population.

For more than a decade, Irish Independent journalists have been warning of the “pension time-bomb” ticking menacingly in the background.

It is widely accepted that over the next three decades the number of people the State’s working population will have to support will more than double.

Rent increases and the housing crisis make it all the more important that serious thought be put into providing for all, young and old.

A balance must be struck whereby the young are not taxed to the hilt to bridge the gap.

The Irish Fiscal Advisory Council (Ifac) found itself in hot water a couple of years ago following a suggestion that the age to qualify for the state contributory pension could increase to 69 over the next 15 years.

Yesterday, Minister for Social Protection Heather Humphreys sought to bring some certainty to who gets what and when.

Her efforts attracted a predictably mixed reaction. The state pension age is to remain at 66, but people will be offered the choice to work until 70 in return for higher pension payments.

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What the Government saw as a “substantial and significant” set of policy measures representing a “clear road forward for the future” was described as “almost a Trojan horse to raise the pension age in reality to the age of 70” by Sinn Féin leader Mary Lou McDonald.

Criticism was also levelled at the lack of detail about funding.

Ms Humphreys said the finance would come from increases in PRSI payments, yet acknowledged that, given the rate of inflation, few could afford to absorb any such rises in the near future.

Pressed about an Ifac report that surmised someone earning €50,000 would have to pay an additional €1,200 in PRSI, she insisted any increases would be “modest” and gradual.

Given Ms Humphreys’ confidence in the unprecedented clarity concerning the chosen route ahead, it was somewhat puzzling to learn that yet another “roadmap” for the PRSI increases would have to be published next spring.

On the upside, it is to be welcomed that long-term carers will finally be provided with a pension.

Many will also be relieved that mandatory retirement has been done away with, so people can avail of more flexible arrangements.

Ms Humphreys said the “public gave its verdict” on its preference to peg the pension age at 66.

However, the jury is surely still out concerning precisely how this can be delivered and paid for without imposing an onerous burden on the workforce.

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