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Call for all social welfare payments to be increased by €20 as older people 'turn off heating'

Age Action said the State Pension should be increased by at least €23 in the Budget.

File photo of an older woman counting coins
File photo of an older woman counting coins
Image: Shutterstock/Iness_la_luz

AGE ACTION HAS called on the Government to increase the State Pension by at least €23 and all other social welfare payments by at least €20 in the upcoming Budget.

The organisation, which advocates on behalf of older people, said that raising all social welfare payments by at least €20 would cost less than €1.5 billion “at a time when inflation has brought in several billion of extra tax revenue”.

Age Action said older people could lose 15-20% of their spending power by the end of 2023, putting many of them at risk of poverty unless the Government takes action in Budget 2023.

Based on an analysis of average incomes and savings from surveys by the Central Statistics Office (CSO), Age Action has found that the average older person living alone will lose €1,532 in spending power by the end of 2022 and the average older couple will lose €3,364.

By the end of 2023, the total loss for older people could be 20% or more of their spending power, the organisation said.

Dr Nat O’Connor, policy specialist with Age Action, said some older people are being forced to turn off their heating due to an increase in the cost of living.

“Age Action has examined the likely loss of spending power in 2022 and it is shocking. Over the course of 2022, the spending power of the full rate State Pension alone will go down by €589 for an individual or €1,118 for a couple.

This loss of income means a struggle to buy home heating oil or to get a car serviced. It is causing older persons around the country to turn off their heating and to reduce their travel, because petrol and diesel are so expensive.

“But many people haven’t realised their losses yet, as their income and bank balance still looks the same as last year. It is only when someone goes to spend money that they see how their spending power has eroded and they have been left behind by rising prices.”

O’Connor added: “We haven’t had this situation since the 1980s, and economic commentators have been too slow to realise just how bad this winter is going to be for older persons, many of whom will struggle to heat their homes.”

Inflation

O’Connor also highlighted the impact of inflation on older people.

“While the nominal value of €1,000 remains the same, it will only buy €900 worth of home heating oil or groceries compared to one year ago, and potentially as little as €800 worth by the end of 2023.

“By the end of 2022, older persons are likely to experience inflation at 9.8%. This means that although they may have nominally the same income or level of savings, their spending power will be down nearly 10%,” he said.

O’Connor added that most older people have a low level of cash savings and, if they have a private or occupational pension, “it is modest and not linked to inflation”.

“With the spending power of both of these being cut, the State Pension is more important than ever as the bedrock of income in older age.”

O’Connor said the UK and many countries in Europe index social protection payments so they rise in line with inflation, noting: “Ireland should do the same, to preserve some part of people’s living standards and to keep spending in local shops and services.”

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Órla Ryan

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