Alice-Mary Higgins (Independent) | Oireachtas source

I move amendment No. 3:

In page 11, between lines 24 and 25, to insert the following: “Report on care

6. The Minister shall, within six months of the passing of this Act, lay a report before both Houses of the Oireachtas outlining the measures taken to ensure that those who engage in care work outside the labour market are supported to ensure equitable access to, and outcomes from, under the scheme.”.

Amendment No. 3 proposes to insert a new section in the Bill to require the Minister, within six months of the passing of this Act, to lay a report before both Houses of the Oireachtas outlining the measures taken to ensure those who engage in care work outside the labour market are supported to ensure equitable access to, and outcomes from or under, the scheme. At the moment it seems that those engaging in care work will not be covered and will not benefit significantly from the scheme. This is really disappointing. We know from Oxfam that, globally, women and girls take on more than three quarters of unpaid care work and make up two thirds of the paid care workforce. When valued at the minimum wage, the 12.5 billion hours of unpaid care work that take place represent a contribution to the global economy of $10.8 trillion a year, more than three times the value of the global tech industry. More directly here in Ireland we have had problems with our previous pension systems and schemes. It has been one of the huge gaps and one of the obstacles. A problem in our pension system at each level has been the failure to properly reflect gender equality issues and to properly reflect care. It is a significant obstacle in the State pension. We are very aware of how many women end up on the significantly reduced rate pension because the periods of time in which they engaged in care were not recognised. While there was a shift in the scheme that increased the number of care credits that may be recognised, the goalposts were moved out, so you went from having ten years recognised to 20 years recognised but under a new system that requires a 40-year contributory record. We did not, in effect, move significantly in terms of the State pension to address the gaps experienced by those delivering care because we increased their capacity but moved the goalposts.

The analysis of private pension tax relief in the State has shown it predominantly benefits men and those on higher incomes. The Minister spoke about the fact that very few people have private pensions in the State. Questions must therefore be asked because the tool we have mainly used has not delivered for us. This is why something like the auto-enrolment scheme is now having to be produced. The scheme of private pension tax relief has primarily benefited high earners and men. It fails from a gender perspective and yet it costs a huge amount .

This comes into my amendment No. 4, which asks that there would be a report before the Houses of the Oireachtas looking at the introduction of a universal pension and that would include detailed research and modelling of the potential introduction of a universal pension, including cost-benefit analysis of such a model as compared with current expenditure on contributory pension, non-contributory pension, qualified adult increases, tax relief on private pensions, and the automatic enrolment retirement savings schemes. We have this plethora of measures for pensions, including now this new automatic enrolment retirement savings scheme, and there is the qualified adult increase, contributory and non-contributory and so on. What would it look like if we were to have a universal pension set at a proper and adequate level, ensuring cover and security for persons in the long term and for all of the people of the State, and if everybody in the State knew they would have an entitlement to a strong, decent and adequate pension? What would the cost be of that compared with what we spend on all of these other measures?

It is important to note that the problem with previous analyses on universal pensions, and indeed some of the work done by the Pensions Commission, was they did not address or look at the tax relief issue. There was a comparison and examination of what gets spent through the social protection system directly on pensions but what was not on the table for consideration was the removal of the private pension tax relief. It still does not seem to be on the table. It is not clear, and I would appreciate if perhaps the Minister would expand on this, whether, if we have the automatic enrolment scheme, which it is hoped will bring in a wider pool of employees to having private pensions, we are also going to look at changing the private pension tax relief system. At the moment it is stratified in a way that is designed to benefit higher earners more. It was even one of the recommendations for the State from the International Monetary Fund back at the time when we had a memorandum of understanding that it should be adjusted because it was seen as an inequitable policy . It was one of the few structural adjustments that did not take place.

We were told in the previous assessment of the cost of a universal pension that the cost would be approximately €3 billion per annum. It is notable, however, that this matches almost perfectly the €2.9 billion that is spent annually on private pension tax relief. The statistic behind this is that 70% of the benefit of this relief is found to be going to top earners, those on the higher incomes, who are predominantly men. A universal pension would largely address the issue of women and inequality in our pension system rather than individuals scrabbling to put together credits to see if they have enough and a huge number of individuals, and as we have seen, historically they tend to be women, finding themselves on a reduced rate pension because they do not meet a contributory threshold that is ever increasing. Will the Minister comment on that increase from 20 years to potentially 30 or 40 years? What is the timeline for that? Given a 30 or 40-year pension contributory requirement, I do not believe most people are going to meet that. A lot of people will fall short and we will see people on reduced rate pensions.

In that context, rather than putting the burden on the individual to try to navigate having a pension through this system, which is becoming more difficult to navigate and where the requirements are increasing all the time, imagine if the €3 billion we spend on private tax relief was spent on a universal pension. People could just have that security into their older age of knowing they would have an income they could rely on and it would not cost the State more than it currently spends on private pension tax relief, which tends to benefit higher earners who already have the capacity to use the private pension tax relief and who are more likely to already be benefiting from the measures. There is nothing to stop them from investing in a private pension scheme if that private pension scheme delivers returns for them.However, the return such schemes deliver is predominantly tax relief. If they schemes are so lauded in terms of investment, they should offer returns that are meaningful for those who invest in them.

Amendment No. 4 packages many of these measures together. It asks that the auto-enrolment scheme, along with all the other measures, be assessed in terms of the cost benefit and what we get from it, what the State gets in terms of the population and people's guaranteed future versus what we would get from the universal pension. It is different from assessments that have taken place in the past in that it includes private pension tax relief. There was a major gap when the €3 billion big-ticket item was taken off the table when we discussed how to get value for money from what we spend on pensions.

When indicating whether she accepts my amendments, the Minister might outline her plans in respect of tracking gender equality. The issue that explicitly needs to be examined in the context of the latter is an analysis of what a universal pension system could look like versus the other schemes we have, including this scheme, in terms of addressing the gaps in income inequality and, in particular, gender inequality, financial security and independence for women. This relates to amendment No. 3 as well. It is the same issue in the context of care. When a large number of women in the State do not have adequate pensions in their own names, one of the problems is that this affects financial independence and financial security. It leaves many women in a position of extreme vulnerability and dependent on their partners in the context of their long-term security. That has serious implications of its own.

I hope the Minister will accept either amendment No. 3 or amendment No. 4, which both request that reports be laid before the houses. If she is not in a position to accept them, however, I hope she might be able to indicate what her plans are in regard to ensuring that the gap in terms of care will be addressed and that there will be an examination of the new auto-enrolment measures in terms of what they deliver in the context of gender and income equality. Are we going to avoid the mistakes that have been made with the contributory and non-contributory pensions whereby gender inequality was built into their design? That is reflected in the tax relief which has delivered gender inequality. What measures will ensure that we do not have yet another plank of our pension policy that fails to address the gender inequality gap relating to pensions?