Mr. Liam Berney:

Congress is pleased to have been invited here today to address the committee on the very important topic of the State pension. It is our view that the State pension continues to be an extremely important social transfer payment and for many retired people it is their only income. Equally, because the number of people in work who have no occupational or second-tier pension is close to 50% the State pension will continue to play a critical role in reducing the risk of poverty among older people for a considerable period into the future.

In this short submission Congress will focus on its three main areas of concern. Our first concern is the rate of the State pension. Congress has consistently argued that one of the main planks of budgetary policy should be to ensure that we insulate the most vulnerable groups in Irish society against the effects of price inflation. Congress plans to make a similar argument in its forthcoming pre-budget submission for budget 2018. We suggest that the old age pension should be increased so that it continues to have the same purchasing power as at present. It is important to say that there are many ways to calculate the rate of inflation. In calculating the appropriate increase regard should be had to all of the measures of inflation. There is more than one level of inflation. Congress believes that the old age pension should be increased in line with the maximum rate of inflation as calculated across the various rates of inflation. If we do not do so then we run the risk of reducing the living standards of a large group of older people whose only income is the State's old age pension.

We have two more concerns about the old age pension, one of which concerns eligibility for the State pension. In 2012, the Government introduced measures that changed the eligibility criteria for the old age pension. We believe that the 2012 changes to the PRSI qualification bands for pensions discriminate against women, in particular, and should be immediately reversed. The decision is grossly unfair as it reduced the contributory pension for people who had an average of 29 annual contributions by €1,500 per annum. More than two thirds of the people affected in this category are women. There was no political debate, public consultation or cost benefit analysis of the measure. Consideration was not given to the issues of fair play, equity or minimising hardship for those who are worst affected. We strongly believe that the changes should be changed or reversed. We should also have proper consultation on the PRSI qualification bands and the ensuing implications.

We have all heard about the gender pay gap. However, numerous studies have shown that there is a significant gender pension gap. A recent study by Mercer found that the gap in retirement income between men and women could be as high as 40%. I have provided a link to the study in my opening statement that will prove useful to members who seek more detail. The 2012 changes to the eligibility criteria must be reversed if the gender pension gap is to be reduced in Ireland. If the changes are not reversed then the situation will worsen. It will probably get worse here than in other comparable places.

Another issue that Congress wants to bring to the attention of the committee is the age at which people are entitled to claim the State pension. Apart from the eligibility criteria changes that I have just referred to the other major policy change that has recently been implemented was a change to the age at which people become entitled to the State pension. In 2014, the State pension became payable at age 66. Further changes are planned with the applicable age changing to 67 years in 2021 and 68 years in 2028.

The decision to change to the age at which the State pension is payable was made without public consultation and engagement and, in our view, without consideration of the implications for working people. Earlier I talked to colleagues about the idea of somebody who does very intensive manual work having to work another two years beyond the time he or she expected to work until when he or she started employment and the difficulties this aspect will cause them.

Congress has suggested that the plan to increase the retirement age to 67 years be delayed. It is planned to increase the retirement age to 67 years in 2021. We should use the period between now and 2021 and have a proper and more inclusive discussion on the implications that such a policy change will have on working people and those affected by the change.

In conclusion, we understand that the main reason the committee has invited Congress to the hearing today is to assist it in drafting a pre-budget submission that has a specific focus on the State pension. In the event that the committee decides to make a pre-budget submission, we ask the committee to do the following: to seek an increase in the rate of the old age pension that is at least in line with the rate of price inflation; to seek the reversal of the eligibility criteria that was implemented in 2012; and we call for a suspension of the proposal to increase the age at which the State pension becomes payable to allow for a proper debate about the implications of this decision for working people.