Dr. Laura Bambrick:

I will start with the recommendation to make over-65s liable for PRSI. The ICTU believes in intergenerational equity and solidarity to help with sustainability of the social insurance fund. The State pension is the biggest part of spending from the social insurance fund, but we have some concerns about a blanket recommendation to make all income for a person over-65s liable for PRSI. People aged over 65 who worked for some or all of their careers as civil or public servants and who were recruited before 1995 paid a special reduced form of social insurance which means they are not entitled to the State pension. This means that many of them are in receipt of a modest pension that is less than the State pension, and they are also not entitled to the household benefit package. There has been some movement since January on public sector pensioners aged over 70 being able to get the fuel allowance, and that is welcome. However, our point is that there is a group of pensioners who are not eligible for the State pension, could be on a modest or smaller pension than the State pension and they will be liable for PRSI at 4% while their next-door neighbours could be on the State pension and their higher or equal income will not be liable.

There are horizontal equity problems. It is State and ICTU policy to support people who want a longer working life, to work after the age of 65 if they are fit, able and willing to do so. At the moment, people over 65 do not have to pay PRSI but, more importantly, their employers do not have to pay employer PRSI. They pay 0.5%. That is just to cover worker's occupational illness benefit. Making people who work after the age of 65 and their employers liable to pay PRSI would create employment disincentives for both sides. Since 2014 or 2012 - I am not sure which - when workers make contributions to their pension pots, they pay social insurance. To then say they must pay PRSI when they draw down their pensions means that they will be taxed twice. It would be the same tax on the same income. Those are three areas of concern. We absolutely believe that people over 65 should be contributing. We also believe that unearned income should be treated equally, but unless suitable income disregards are included in the design, there will be poverty and employment disincentives. A blanket charge that makes over-65s liable for PRSI will cause problems.