Lynn Ruane (Independent) | Oireachtas source

I move amendment No. 16:

In page 30, between lines 7 and 8, to insert the following: “Report on equality impacts of deferred pensionable age

48.(1) The Minister shall, within 6 months of the passing of this Act, prepare and lay before both Houses of the Oireachtas and the Joint Committee on Social Protection a report on the distributional and equality impacts of the deferred pensionable age, in particular an analysis of how such a measure will impact different types of workers of different income levels.

(2) A report under subsection (1)shall include analysis of alternative proposals for pension reform which would benefit manual, service, gig workers, and all other types of low income worker, including options for a universal pension.”.

Amendment No. 16 seeks a report on the equality impacts of deferred pensionable age. It seeks an analysis of how this policy would benefit different types of workers and different income levels and whether it would benefit higher-income workers more than low-income workers. The amendment also seeks revised proposals for pension reform which would benefit low-income and manual workers.

It is a huge concern that this new policy of optional deferral will function, in reality, for most people as a pension cut by the back door. It is alarming to imagine a future scenario in which a deferred higher rate of pension is used as a justification for failing to increase the baseline rate of State pension adequately as the years go on. It is easy to imagine working-class people in physically demanding jobs who want and need to retire at 65 being shamed in a way or simply told that if they want the higher pension, they can work for longer. No one should have to make such a decision after decades of hard labour.

Let us look at the profile of people now coming to the age of 65. All my aunts and uncles are now aged between their late 50s and 65 and they think of the deferred pension. They have been working not just since they were 18 and left school. There are people in that age bracket who have been working since they were ten or 11, so they have often already worked 15, 16 or 17 years longer than people in any other age bracket. Early school leaving was prevalent among the generation of people approaching 65. My mam and her ten siblings are all approaching that age. Over the next few years, therefore, the generation of early school leavers, among whom there was not a high rate of people making it through secondary school, will be impacted not only in the sense that they could end up on a lower rate of pension, having to work longer to get to the higher rate, but also in the sense that they have already worked sometimes a hell of a lot more years than most of us have.

The reality is that this policy of an optional pension deferral is for a very specific type of worker. Very few people who have put in such a lifetime of work in a physically demanding, low-income job will have the ability or desire to defer their pension. If they do, that is an option for them, obviously, and if they feel they have the capacity, that is fine, but for many people such as those the Minister mentioned - bricklayers, people working on sites, people working with their hands and people working on their feet all day - I feel, and many of us feel, that it is morally unacceptable to associate a higher rate of pension with a deferral because it essentially amounts to a cut for the working class, who may not be in a position to work those optional years. Those who work in services, behind desks and so on, largely enjoying relatively higher incomes throughout their lives, will be offered a higher rate of pension at the end of it all, despite the fact that they will need it far less than their lower-income counterparts who cannot work for longer, and despite the fact that they are far more likely to have private pensions of their own.

This is a wrong direction for pension reform. I note that Senator Higgins also has repeatedly highlighted in recent years that the cost of a universal pension would be in the region of €3 billion per year. We are already spending €3 billion on private pension tax relief alone, a benefit which we know accrues mainly to high-income earners. Some 70% of that relief accrues to the top 20% of earners, so a reform is crying out to be made, given the constant rhetoric we hear about the unaffordability of pensions and given our ageing population. If we are so concerned with making pensions affordable, why do we not start there? I have already highlighted, in respect of a previous amendment, that other countries in Europe with much older populations and much less thriving economies have not had to resort to increasing the pension age, as Ireland's Government has done.

I urge the Government to pursue pension reforms which benefit all workers equally and to keep in mind that for some people it will not be an option to defer their pension due to the type of work they have engaged in. They may also not meet the criteria for disability and may have to jump through several different hoops to then be determined as disabled at a certain point when, really, it is just a lifetime of hard labour that has got them to 65 and now being ready to retire after it. Some people may end up with a disability whereby they can shift onto payment before any sort of deferred pension. However, as regards those workers who do not fall into that bracket and potentially do not want to be categorised as disabled, their bodies are tired from the type of work they have done and the length of time they have had to do it. We feel, therefore, that this is a retrograde step and we have many concerns about the optional deferred pension age.