Sunday 19 January 2020

The pension time bomb needs impartial remedy

Ageing demands expensive care and health provision and that is where the difficulty arises. (stock photo)
Ageing demands expensive care and health provision and that is where the difficulty arises. (stock photo)
Editorial

Editorial

Growing old can be a struggle, but growing old and being poor is a nightmare.

Ageing demands expensive care and health provision and that is where the difficulty arises.

The State is sitting on a pensions time bomb, the ticking away of which has been ignored by government after government.

This week we revealed how more than 5,000 people over the age of 65 are caught in financial limbo.

Despite the fact that they have worked hard all their lives, they must wait until they are 66 before they are entitled to a State pension. Small wonder, the State has a big stake in keeping people working longer.

The costs of servicing the State pension will rise from €6.5bn in 2015 to about €8.7bn in 2026. No surprise then that the State pension age will rise again to 67 in 2021 and 68 in 2028. Living longer costs the State more and the Fair Deal scheme was put in place to meet the mounting cost of caring for the aged.

It involves freeing up equity from homes. As things stand, it will not be sufficient and needs to be reviewed - something the Government intends.

But how this is done is massively problematic given that only 53pc of the population has a personal pension, leaving 47pc of the Irish workforce reliant on the State.

Yesterday, the Attorney General warned that plans to give farmers massive write-downs of up to 90pc on their farms, when it comes to assessment for Fair Deal contributions, could lead to all kinds of problems.

There must be equality in any arrangements and farmers can not expect preferential treatment. All must be treated fairly, that is the only criterion that matters. There is no room for special pleading or opt-outs on means tests given the spiralling nature of nursing home costs.

There must be clarity and certainty in establishing entitlements, but most of all there must be impartiality.

Irish Independent

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