Oireachtas Joint and Select Committees

Wednesday, 17 May 2017

Committee on Budgetary Oversight

Pre-Budget Submission: Age Action Ireland

2:00 pm

Mr. Justin Moran:

The priorities that Ms Naomi Feely referenced were the fuel allowance, the living alone allowance and the State pension. Separating that out from the 2012 cuts, we are hoping for an increase of €5 in the weekly State pension rate; we want to increase the living alone allowance to approximately €11 - we have not finalised that figure but we are looking at the Vincentians figures of around €11 and we still have to finalise our proposal on the fuel allowance. We will finalise our figures before the end of June and they will be distributed to members.

I think it is important to take a moment to make this point on the State pension. Ireland is one of very few countries in the European Union that has no system for how the State pension is increased.

If one looks at Britain, for example, there is the triple-lock mechanism where its state pension increases every year on the basis of the consumer price index on average earnings of 2.5%. I am not necessarily saying that we should take that system but it is an example of the kind of systems that are out there. Almost every other European country has some sort of system, whether it is measured by GDP or by average earnings, or a formula or combination of the two. I believe that Ireland is one of only two or three EU countries that have no formula and the figure is decided on through a budgetary process.

One of the arguments put forward by Age Action is that the national pensions framework, published in 2010, sets out that the State pension should be 35% of average earnings at the top rate. This would mean a State pension of around €249 based on CSO figures for average earnings in the first quarter of 2017. We are currently at approximately €238 and a €5 increase would move us in that direction. That is one of the reasons we would argue for it. The 35% as identified by the Government in 2010 was to keep people out of poverty and the State pension is the single most important tool we have to keep pensioner poverty down.

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