Dr. Nat O'Connor:

On the non-contributory State pension, the Deputy is quite correct. You can earn up to €200 from employment without its being counted if you are on the non-contributory State pension, but you cannot earn from self-employment. That is an anomaly in the system and a very good example of the issue with the eligibility criteria that sit alongside the means test. It is not just about a means test for €200 but a matter of €200 of a certain form of income rather than other forms. That is definitely a problem in the system.

With regard to the issues of capital and saving for older age, Age Action published a report last year, Spotlight on Income in Older Age. We conducted surveys, interviews and focus groups with older persons to understand their circumstances regarding income and savings. On the issue of squirrelling money away and having money for older age, there is a big element of fear. People do not know how long they are going to live or the expenses they will face. They could incur medical expenses and the boiler could go in the house. They could be in a rural area where they need a second-hand car, and they might need to buy another second-hand car to keep them independent, able to get around and do the basic things they need to do. There is much fear and uncertainty over how much money they will need so they will not become destitute in older age. A great risk with the means testing is that the State will push people to spend their savings but have to step in ten years down the line with grant schemes and additional supports if those people no longer have any savings. That makes no sense at all. We need to change our understanding of how long we are going to live. The good news is that the average life expectancy at the age of 65 is 20 years, but that means that, over the course of those 20 years, you will have to replace the second-hand car and, probably, the boiler. You will certainly have to put insulation into your home if you have not done so already and possibly add more.

There are very knowable capital expenses, which is why Age Action has called for a cost-of-ageing study to be conducted. We recently carried out a cost-of-disability study. We need to look at the evidence concerning the kinds of basic costs – these are not the costs of luxury items – to keep people functioning in older age. A study needs to be carried out by the Department of Social Protection or a State body so we can plan based on that information.