Éamon Ó Cuív (Galway West, Fianna Fail) | Oireachtas source

That replaces the State forgoing income tax at the top end. At the moment, if I put in €100, I effectively get €40 off if I am on the 40% rate of tax, €20 off if I am on the 20% rate, and nothing off if I am not paying income tax, and the 30% is going to replace this. It could be argued that, for an awful lot of people, it is actually a reduction in the State input into their pension, not an increase. If I am correct, it begs another question. Most of the people who will be able to go outside auto-enrolment and put more money into pensions are the well-to-do. Has this debate taken place with the Department of Finance? Are we going to continue giving them a 40% discount, which is the same as giving 40% cash input because it has the same effect, or will we allow them to get 40% and the rest to get 30%? It had been proposed by the Department of Social Protection back in the day that everybody would get 33%. Will Mr. Duggan elaborate on that?

Mr. Duggan spoke about replacement rates. The great thing about the State pension at the moment is that, give or take over the time I have been working, it has more than kept up with inflation and in real terms is effectively better today than it was in the 1970s. When I go out on my pension, the funded pension, my understanding is that is it. Mr. Duggan spoke about a replacement rate - say, 60% or 70% - but has the Department analysed what would happen if I retired at 65 or 66 and got a replacement rate of 60%? If the average person is living to 83, 84 or 85, by the time I get to 85, what is the real replacement rate taking inflation into account, because my State pension will keep going up but this one has the disadvantage of being frozen in time? If we get 10% inflation like we have at the moment, 5% or an average of 3% or 4% over what will nearly be 20 years and, in some cases, well over that, what kind of erosion will there be or has the Department calculated that?

There is another issue that will weigh heavily on people. To me, the reason people can survive on 50% or 60%, and I see this with pensioners coming in to me all the time and all of us working at the bottom end see this, is that a couple get two State pensions amounting to €500 per week, which would not be a huge salary if they were working but would be a very small salary if they were paying the mortgage on a house. However, traditionally, the vast majority of people of pension age have owned their own property. Has the Department done comparisons regarding the amount of money someone would need to get every week if he or she was paying the average commercial rent for his or her home, even allowing that he or she had downsized, which people who own their houses have the great privilege of not having to do? That is a much wider debate because not everybody downsizes. It does not particularly suit rural people because, when families come home, they tend to pile into the house. Has the Department done an analysis as to the person who puts the money into the pension fund as a priority and rents the house, which we are told is the way to go and the way of the future, although I do not agree, and the person who decides he or she is going to own a house so that when he or she gets to pension age, he or she will own the house and live off the State pension and a private pension and not have to pay an ever-increasing mortgage as property prices go up, as they inevitably do over time? Have we done an analysis of those choices?

I would have taken the second choice - own my house first and worry about the pension afterwards - because if I owned the house, I could live on a more modest income. Have we modelled the choices? This is the real world and these are the types of question people ask in constituency clinics. People think smartly and realistically about these issues.