Kate Walsh (Progressive Democrats)

Poverty in an affluent society is a serious and pressing issue across the developed world. Poverty persists and the causes of poverty and child poverty must be pursued and addressed. The issue before the House today is the ESRI report on pensions and the effectiveness of the pensions system in preventing poverty in old age. Although this is not the main purpose of the report, it is the aspect on which I wish to focus.

The most pertinent finding in this regard is that the average income of a pensioner is just over half the average industrial income. The main source of retirement income is provided by the State. State pensions provide an income for more than nine out of ten pensioners. Occupational personal pensions provide an income to only one third of pensioners. These provide perhaps one quarter of the average income during retirement. The fact is that older people depend on the State for old age pension and personal or occupational pensions which are not providing significant incomes. The report does not find that a significant income is provided to older people who put their money into investments. The finding was that investments provide an income for only a minority of pensioners during retirement. The average amounts received are quite small. There is considerable variation in pensioners' incomes. The report found that the upper category of pensioners received approximately five times the income of pensioners in the lowest group. As a result, our pension policy must be progressive.

The Government has a record of improving income support for pensioners. I am proud that in an area on which we have concentrated, the personal rate of old age pensions was increased in the last budget by €12 per week, an increase of over 7%, which brought the old age pension to €179.30 per week. We promised to increase the State pension to €200 per week by 2007 and we are well on the way to meeting our target.

Let us see how far we have come. In 1997 the old age pension was just €99 per week. In 2005 it is €80 per week higher than that, which is an increase of over 80%. We are making great progress on our promise. Old age pensioners will receive deserved improvements in their living standards. However, as I said, our pension policy must be progressive. State pension schemes pay benefits on a flat basis.

The report found that the average amount paid in State benefits is broadly the same for each group of pensioners, regardless of income. The difference between high income and low income pensioners is that those with a high income have an occupational or personal pension and, to a lesser extent, earnings. We must work to ensure that people are aware of possible future problems and are encouraged to take action now.