Ms Niamh Kavanagh:

I am the development officer for the Irish Senior Citizens Parliament. I will be joined shortly by our CEO, Pat Mellon, who is attending the joint committee meeting next door. The Irish Senior Citizens Parliament, ISCP, offers a strong, unified voice representing the needs and rights of older people at local, national and European levels. We seek to enable and encourage older people to self-advocate and to build capacity and confidence to speak for themselves on all issues. Our vision is an Ireland where older people are valued as equal citizens, can enjoy the full protection of their human rights and are full and active participants in society. We welcome and thank the Oireachtas committee for the opportunity to engage with it and to outline our views on the impact of means-testing on the State pension and other social welfare schemes.

We believe in using the lived experience and knowledge of our members to inform our discussions. We met a cohort of our member base to listen to their views on this key issue and the following content is the result of this discussion. The ISCP has the issue of equality and rights for older people at the core of its work. We work to ensure the implementation of policy commitments pertinent to aging and older people. A fundamental element of this relates to ensuring our members and older people generally have security of income in their older years, thus ensuring a quality of life and equality of opportunity. The purpose of a social protection system is to act as a safety net for those in need of income support to reduce the risk of poverty and social exclusion. Central to this system for older people is the pension. State pensions are a significant financial resource for older people in Ireland, constituting approximately two thirds of total income for those aged 65 and above. Pensions are the largest outlay of the social protection system, accounting for almost 40% of total social welfare expenditure in 2019. Compared with EU-27 member states and OECD countries, Ireland still spends less money on pensions, which is a function of Ireland’s demographic structure, and relies more heavily on means-tested social assistance rather than social insurance. However, retirement from employment continues to correlate with a decrease in income, resulting in dependence on the State pension for many individuals within Irish society. The growth in wage incomes has outpaced that of State pensions, thereby exacerbating the disparity between the incomes of retirees and employed individuals.

The commitment to link the State pension to 34% of the average wage has not been realised, thereby adding further insecurity to pension provision and the gap between rich and poor. This is further exacerbated by people’s ability to afford a second tier of pension. The Irish economy is influenced by policies that tend to favour those who are already doing well. For example, as Social Justice Ireland has reported, things like pension tax breaks mainly benefit the top 20% of earners. Because of all the tax changes and welfare programmes in budget 2024, the difference between rich and poor people will reduce by €10 per week. Overall the rich-poor gap will be €960 per week in 2024. This decrease is mostly because of the temporary measures to help with living costs in budget 2024. It is worth mentioning that the emergency energy crisis measures from 2022 to 2024 also helped to reduce this gap in 2022 for the first time in ten budgets. Unfortunately, as those much-needed temporary measures are not scheduled to be repeated, the gap is expected to widen again. Age Action's 2023 report, Spotlight on Income in Older Age: The State of Ageing in Ireland 2023, found that poverty, deprivation and income inadequacy are facts of life for many of those who are reliant on the State pension, which is the “second lowest level of income replacement in the EU”.

Our members echoed this fully as part of our preparation for this meeting. One said:

I am afraid to heat the house everyday as my oil might run out, I keep it for when I babysit my grandkids (3 days a week).

Another said:

I shop by the offers on 'sell by’ dates; if it is out of date today then it is cheaper.

The current system is not structured to encourage people to access all to which they might be entitled. The anomalies within the system discourage engagement with it. We have found that many people are fearful of losing income if they apply for supports like fuel allowance or living alone allowance, as mentioned. One person said:

I had heard stories of people losing income because they were means tested, there were so many rules for different supports & no one central department to ask for information. I just gave up. If I apply for one thing, I might lose the other. It is better off to keep quiet.

The fact that non-contributory pensions are already means-tested leaves us fearful that discussions like these may mean that thought is been given to means-testing contributory pensions. What we do not need is more ways of taxing our retirees; rather, we need a system that recognises the needs of those who have reached retirement and need to feel safe, comfortable and valued. Rather than means testing the basic needs of those who have given more than their fair share, a closer look at the pension contributions tax breaks, which very high earners can avail of, may well be a more constructive and equal approach.

There is need for an overhaul of the system to allow for a more effective support to ensure older people and those on other State transfers would have a better standard of living. The ISCP supports a review based on Social Justice Ireland’s call for a universal pension, which would solve many of the problems inherent in the system as it would provide a guaranteed income during old age for all older residents on an individual basis, without regard to anomalies in their social insurance history. It would also provide a secure and certain framework around which individuals can plan for their retirement and, over time, it would distribute income, creating a more egalitarian society.

We believe very strongly in the rights of older people to continue to contribute to society in all areas, including after their working lives. In the last few years, we have worked with many retired workers and staff associations with similar experiences and concerns relating directly to their income. There is a very real concern for their ability to afford to engage in society. One member who was brave enough to be named, Breda, said:

I gave up my outings with my retirement group as I could not afford to go. I also stopped my art class as the cost of the contribution to the hall rental was more than I could afford.

The ISCP believes strongly in the right of older people to be full participants in society. We believe this topic needs further debate and discussion and a more nuanced approach than the current system offers. We thank members for their time and look forward to discussing this further.