Joan Burton (Dublin West, Labour) | Oireachtas source

I thank the Deputies for the opportunity to contribute to the motion and to highlight the Government's steadfast commitment to our older citizens. When I became Minister for Social Protection, even though the public finances were practically bust, I was determined to ensure we protected older people given their massive contribution to the State. They helped sustain this country through bad times and bring the country to better times. Now, as Tánaiste, my goal is to ensure our older citizens share in the recovery that is under way, a process which began in the previous budget.

Over the past ten years, there have been significant improvements with regard to the level of pensioner poverty in Ireland which, I am happy to say, has been steadily reduced. In 2004, the at risk of poverty rate for people aged 65 and older was very high, at 27.1%. According to the CSO survey on income and living conditions, SILC, data, by 2013 this rate had dropped below 10%. The consistent poverty rate for those age 65 in 2004 was 3.3%. By 2013, this had fallen to 1.9%.

It is a tribute to everybody involved in politics in this country that, notwithstanding our terrible economic experience, we have prioritised the protection of older people. Their relative position has improved compared with the boom days of 2004. The figures demonstrate that progress has been made in protecting older people against poverty, something which has been, and will remain, a key priority for the Government. Central to safeguarding older people against poverty is the State pension. It is a very valuable benefit and the bedrock of the pension system. A little known fact about our welfare system is that State pensions, including the contributory and non-contributory pensions, account for the single, largest block of social welfare expenditure.

As we heard from previous speakers, while expenditure on pensions is increasing because of the growth in population and demographic pressures, this is being successfully managed within the overall welfare budget. Last year, in 2014, overall expenditure by the Department was €19.8 billion but expenditure on the pensions programme accounted for almost one third of this figure at more than €6.6 billion. In 2015, expenditure on the pensions programme is estimated to reach €6.7 billion, or 34% of total expenditure by the Department of Social Protection.

I thank Deputies for the reference to last year's budget, in which I increased the living alone allowance, a payment made to pensioners and people with disabilities who live alone and which was last increased in 1996. I made the decision in recognition of the fact that people living alone can be more vulnerable to economic deprivation than a two person household where resources can be pooled. We are all familiar with houses where at one point there were five people, and at a certain stage even five adults, and now one individual remains and he or she must still carry the costs of the household.

A second factor was that a very wide range of pensioner representative groups, whom I meet regularly, had identified such an increase as a key budget priority for a number of years. I will get technical for a moment. The real value of the State pension can be seen when viewing the market cost of an inflation-linked annuity of €12,000 a year, which is the current annual value of a State contributory pension. If one were to buy that on the market, the cost would be in excess of €300,000. The value does not include associated benefits available with the State pension such as increases for a spouse or another adult living with the person who qualifies.

Core pension rates have not been reduced in the period since 2009, despite the significant pressures of which people are aware following the crash. In dealing with the inherited economic crisis, it was a Government priority to protect the primary weekly social welfare rates such as the State pension. This was because maintaining the rate of the State pension and other core payments is critical in protecting people from poverty and gives people assurance and certainty about what they have to spend. When one is aged 70 or more, one does not have the option of earning extra income, as younger people might have. CSO figures show that people over the age of 65 are significantly less likely to be at risk of poverty or deprivation than those aged under 65.

Protecting the State pension has not been as easy as it sounds because when the Government came into office in 2011, the Social Insurance Fund deficit for 2010 was an enormous €2.8 billion. To put it more plainly, there was a huge hole of €2.8 billion in the fund. By building a jobs-led recovery, the Government has ensured that the Social Insurance Fund has been topped up by PRSI contributions from people going back to work and, therefore, we have been able to maintain the contributory principle. As a result, income from PRSI receipts this year is targeted to be just over €8.24 billion, with expenditure at almost €8.42 billion. The €2.8 billion hole in the Social Insurance Fund that put social protection at terrible risk has reduced to less than €200 million. In fact, we will shortly eliminate it altogether if we can continue the recovery. That is something about which we can be very pleased. It is a fifteenfold improvement on the funding position I inherited. The figures indicate a very healthy improvement in the income and expenditure position of the Social Insurance Fund. That allows me, as Minister for Social Protection, to ensure that the funding position for State pensioners is more than adequately protected. Pensioners do not have to worry that their pensions are at risk because as a country we have recovered to the point where people are going back to work and the income from PRSI, to which we all contribute, is available, in particular for contributory pensioners. That is a very important social insurance that protects everybody in society, but especially people of pension age.

Our country's population and demography is slowly but surely changing, with an increasing number of people entitled to a State pension. As a result, every year since I became Minister I have had to put aside approximately €200 million per year for the additional pensions required. That means that even if nothing else changes in the next five years, social welfare spending must increase by €1 billion to pay for all the contributory and non-contributory pensions required. We are able to do that as a society by careful management of our economic situation. It is so distressing for people in this country to see unfortunate people in Greece going to ATMs without being sure they can take out their money even after they have waited for hours to access their pensions.

Members also referred to the household benefits package. It is a very valuable support for older people and includes electricity and gas allowances worth €35 per month. The free television licence is worth €160 per year. The Department will spend €227 million this year on the package for approximately 415,000 customers. The package is generally available to people living in the State, aged 66 years or over, who are in receipt of a social welfare-type payment. Importantly, the package is also available to carers and people with disabilities under the age of 66 who are in receipt of certain welfare-type payments. Widows and widowers aged from 60 to 65, whose late spouses had been in receipt of the package, retain the entitlement. The annual value of the package to each social welfare recipient is currently €580. I mentioned that free television licences form part of the package. That is important as television is an essential social good whereby people who might otherwise be a bit isolated can use it for entertainment, politics, sport or to keep them informed.

The Christmas bonus was abolished by the previous Government in 2009. I remember the gasps of horror that went right through the Dáil on the day that was announced because people were shocked. The bonus was something everybody in the country valued for those who were retired or on pensions. I am pleased to say that because of the fledgling recovery I was able to partially restore it last year. A bonus of 25% was paid in early December to all long-term welfare recipients, including all pensioners, carers and people with a disability, at a cost of more than €65 million.

This benefitted over 575,000 pensioners and 1.23 million welfare recipients in total.

People mentioned free travel. I am happy to say that when I sat down with the Taoiseach, after I became leader of the Labour Party and was taking on the job of Tánaiste, the Taoiseach and I agreed, in the statement of priorities, that the Government commits itself to the full retention of the free travel scheme. It is available here and in the North and more than 828,000 people are in receipt of it. Including the companions and spouses, 1.3 million avail of free travel, and it costs the State €77 million, which is money well spent. When groups of pensioners take the train to Killarney for a nice day or a midweek break it is good for tourism and Killarney, and it is great for retired people to be able to do it in some comfort.

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