Seanad debates

Friday, 17 December 2021

Social Welfare Bill 2021: Committee and Remaining Stages

 

10:00 am

Photo of Alice-Mary HigginsAlice-Mary Higgins (Independent) | Oireachtas source

I move amendment No. 8:

In page 16, after line 31, to insert the following:
“PART 3

REPORTS
Report on pension inequality

24.The Minister shall, within six months of the passing of this Act, lay a report before both Houses of the Oireachtas to include: (a) an analysis of the impacts of previous changes to contributory requirements for the State Contributory Pension in terms of the numbers of persons within each band and the comparative financial impact on each gender;

(b) a gender analysis of the potential impacts of introduction of a Total Contributory Approach, including a consideration of the comparative impacts of—
(i) a 30 year contributory requirement, and

(ii) a 40 year contributory requirement;
(c) an estimate of the proportion of persons of each gender likely to be on a reduced rate rather then a full rate contributory pension under of—
(i) a 30 year contributory requirement, and

(ii) a 40 year contributory requirement;
(d) a comparison of the likely estimated annual public expenditure on a contributory pension based on—
(i) a 30 year contributory requirement, and

(ii) a 40 year contributory requirement;
(e) an estimation of the likely estimated annual cost of a universal pension;

(f) proposals for how an additional €2 billion per annum might most effectively be deployed to address issues of gender inequality within the pension system; and

(g) policy options to address the specific gendered pension inequality experienced by women born before 1946.”.

There is nothing wrong with reports. They are a tool we have because there are constraints in that we cannot make amendments that impose a cost on the State, due to the rules and Standing Orders. The reports are a mechanism. There is no harm to them. In many cases, they sit within this Act. They point to a consideration that must be important.They rightly try to influence, indicate and raise a concern. If we see an issue that we, in good faith, really believe is important then we want to flag it so as to ensure an issue gets addressed. For the people whom we represent, and if we want to be able to say to the public that this is going to be looked at, then a report is how we guarantee it. Of course, wherever possible it is much better if somebody agrees to do a report or take the engagement. This provision is important if we had a Minister who said that he or she was not going to engage with a matter. This provision would ensure that at least we would have signalled that a matter needed to be considered by the Department. So reports perform important functions and there are occasions when they are successful. For example, I sought a report on open adoption and after a report was produced there was a change of policy in the Department.

I wish to raise a fundamental issue that I am extremely passionate about. Before I entered these Houses I worked for many years with an organisation called Older and Bolder, which is an alliance of all of the organisations dealing with older people in Ireland. I worked with the National Women's Council of Ireland on economic justice for women and economic equality. I have met older women up and down the country who still feel the impacts of the marriage bar, pension injustice and pension inequality. I wish to note that the gender pensions gap is wider than the gender pay gap.

I felt disappointed after I read the report produced by the Commission on Pensions. The approach by the commission was constrained in terms of what was put forward on a total contributory approach. The commission brought some organisations in but specified it was only for the care component and not for the wider issue of gender equality, even though there is huge expertise. I can say that there is huge expertise available as I have worked with the National Women's Council of Ireland. The council has done incredible work and put forward proposals on a universal pension, and how to fix all parts and each pillar of the pensions system to address gender equality, and ensure that more is done for gender equality. In recent years the goalposts have shifted where women have continually paid the price.

In terms of the 2012 changes, we were told that the pension did not get cut during the period of austerity but the requirement for contributions increased. Only a third of the people who get the full contributory pension are women, so women are much more likely to be on reduced rates. I first realised this happened when I met women who live on €100 or less a week as they are on a reduced rate. When contributory requirements increased from ten to 20 years people found themselves on the lower tiers of a reduced rate pension. Rates were cut. The top rate stayed the same but people not on the top rate found themselves two or three rungs down the ladder. That is what happened in 2012 and it is important that people know the context. The situation led to great concern and then we were told that a total contributions approach would be brought in. In fairness to the then Minister for Social Protection and now Senator, Regina Doherty, and I do not know how the Department have translated it, but she personally did have an understanding that this was important.

The goalposts moved when the new bridging piece on the total contributions approach was brought in. I mean we were told that the Department would give people more years in recognition of the contribution to care but the threshold has been increased from 20 years to 30 years worth of contributions. When that was introduced the threshold figure jumped again. The Oireachtas Joint Committee on Social Protection in the last Oireachtas produced a strong report. I know because I was a member of that committee. The report recommended that the contributory requirement should not go above 30 years. We said that the jump to 20 years had already had such an impact that a jump to 30 years needed to be done gradually and should not go further. What actually happened? The Department moved it to 40 years. The Department said it would recognise more years of care but people are still only at the halfway point. In addition, because of contributions that are made while people receive a welfare payment, and payments that are made in terms of care, people are capped at 20 years in total at the moment. So women who find themselves in a certain position are only at the halfway point. Again, women suffered as a result of the jump from 20 years to 30 years. What was meant to be an issue that would repair and address this matter instead acted as a means to push the goalposts out. So the woman who did not have enough contributions still did not have enough contributions that were going to be recognised.

The report produced by the commission talks about a 40-year requirement. How many Senators know people who will have made 40 years of contributions or even a solid 20 years of employment contributions that they can rely on in that period? We know many people start their working lives late. We are effectively mandating that people will have to work for years longer to get enough contributions and that is why this report is really important.

I ask the Minister to do five things. One, analyse the previous changes. I want an analysis done on the comparative impact, from the perspective of gender equality, if we brought in the total contributory approach at a 30-year contributory requirement and a 40-year contributory requirement. Let us have a breakdown of the figures for men and women in Ireland as such information would be useful to us all and allow for better decision-making.

I want an estimate of the proportion of persons of each gender who will likely find themselves on a reduced rate pension if we opt for a 30-year contributory requirement and a 40-year contributory requirement. I want a comparison done on the likely cost of a contributory pension that is based on a 30-year contributory requirement and a 40-year contributory requirement. Let us see the difference. We know that 40 years of contributions will cost more but that amount might be worth it for the difference if the 30-year option gives us more on gender equality and ensures more people will be on a full pension, in terms of the social benefits.

I want another comparison done on that approach and a universal pension, to see if it proved much less complicated but much more equal, for all of those in Ireland above a certain age. A universal pension is a system that has been used effectively in other countries. The National Women's Council of Ireland and very many civil society organisations have called for the introduction of a universal pension for years. A universal pension would address all of the inequities. It would address legacy issues like the marriage bar and it would address the issue for women who were born before 1946 who never had access to the homemaker's credit scheme. There is a particular bad situation for women who were born before 1946 and they are in their 70s now. They are exactly the women who were affected by the marriage bar when they were in their 20s and 30s. These women have an anomaly at the moment because they are not recognised for lots of forms of care credit. The Minister could address all of the anomalies and get a clear point of equality if we had a universal pension system but first let us see how much this costs because it might just be worthwhile.

I know that I cannot get the Minister to address Revenue in terms of her Department. It is regrettable that the Commission on Pensions spoke about pension sustainability and so forth solely for the State pension but did not allow the witnesses who approached it to address the huge elephant in the room, which is the private pension tax relief.

In terms of the private pension tax relief, it is conducted in a very unequal way at the marginal rate. I have the figures for 2014, and I do not have more recent figures. From the 2014 figures we know that about 70% of the benefit went to the top 10% of earners, and 50% of the benefit went to the top 5% of earners. Plus the majority of the people who benefit from a private pension tax relief at the marginal rate, which literally means that the people who earn more get a larger percentage back from the State, get a lot more from this scheme than those who are on lower incomes. There is also the cost of the system. More men avail of the scheme, which contributes to gender inequality. There are more higher earners in the scheme. It is worth mentioning that this scheme was one of the very few points mentioned in the memorandum of understanding that we had with the troika. Even the troika said that we should standardise the scheme and make it 30% for everybody rather than 20% and 40% plus a source of inequality.That is something the troika asked the State to do and we did not do it. This costs approximately €2.9 billion every year. We know that figure but I have been cautious in using a figure of €2 billion. What would be the effect if we put €2 billion of that €2.9 billion into our State pension system to make it fully equal for women and men in Ireland? This is a fundamental point.

The Minister will be glad to hear that will be the longest speech I will give today. The point is really important. This is one of the matters that brought me into politics and I care about it immensely. There are great ideas out there and I know Senator Ardagh, for example, spoke about it in the previous committee as well. I am really worried we will get this wrong again and I just feel we need hard and proper gender analysis to ensure the State makes the right decisions as we go forward and following the publication of the Commission on Pensions report.

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