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The pension age is now a major election issue - so where do all the parties stand?

The pension age is set to increase to 67 in 2021, and 68 in 2028.

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THE RETIREMENT AGE and State pensions has become a big issue in the first week of campaigning for the 2020 general election, with parties trying to both appeal to voters but also acknowledge that the growing population requires a change in tack. 

At the weekend, Justice Minister Charlie Flanagan told RTÉ’s The Week In Politics that the plan needed to be “seriously looked at, urgently” when asked if Fine Gael was rolling back on increasing the retirement age.

The Fine Gael-Labour government increased the age at which you can start to receive a State pension from 65 to 66 in 2014, but this has resulted in thousands of 65-year-olds signing onto Jobseeker’s Benefit to bridge the gap.

The pension age is set to increase to 67 in 2021, and 68 in 2028 under the same plan.

It’s estimated that the number of persons at State pension age and older will more than double from 586,000 in 2015, to 1,402,000 by 2055.

In Budget 2020, Fine Gael set out to provide pensions for 677,000 older people at a cost of €8.4 billion. This has been rising steadily since 2007, when it cost almost €5 billion. It cost €7.7 billion in 2018. 

A State pension (contributory) is worth between €248.30 and €258.30 depending on your age. A non-contributory State pension is a means-tested version of the above for those who don’t qualify for the full State pension because of their social insurance record. That payment is worth between €237 and €247.

Describing the pensions challenge, Minister for Employment Affairs and Social Protection Regina Doherty said:

We pay pensions out of the PRSI of workers, and as we move on there are more pensioners than there are workers so we have this thing called ‘the pensions time bomb’, so if we did nothing at some point in the future we wouldn’t have the money to pay people’s pensions.

Callers to RTÉ’s Liveline yesterday said that they were “annoyed” and “furious” about the increase in the retirement age, with one caller saying that he wasn’t sure how to vote anymore because “this is a big issue for me”.

Fine Gael

Speaking about what her party planned to do on pensions, Doherty said on RTÉ’s Morning Ireland today:

“We’re adamant that people have security in their pensions. So to be fair, the pensions policy that we have is that [the retirement age] will increase to 67, and in a number of years’ time, it will increase to 68 because we need to ensure sustainability.

She added:

“But what I have in the manifesto is a ‘pensions pathway’ because over the last couple of years, people told me that they feel degraded by having to sign on for the dole when they reach 66. They feel that the clauses and restrictions around Jobseekers Benefit shouldn’t apply to them. 

So I’m introducing a new transition payment. it will not have the habitual residence [condition] so pensioners can travel as much as they like. 

One of the requirements of being on the dole is that you are available for work.

When asked why this measure was being introduced now, as the retirement age has been 66 since 2014, Doherty said, “It’s only in the last year during the Total Contributions public consultation that I held about the new model about how pensions are calculated that I’ve really felt the sincerity of people saying to me it’s not fair making people go on the dole when they’ve worked all their life, and I agree.

“This is the first opportunity in our manifesto that I’ve had to bring forward this policy.”

There had been a State Pension Transition, but it was abolished in 2014 when the retirement age was increased to 66. This was worth the same amount as the State pension, but you needed to be unemployed to claim it, whereas with the State pension, you can work and claim it at the same time.

On outlawing contracts that force people to retire at 65 – which was suggested by Fianna Fáil leader Micheál Martin yesterday – Doherty claimed it “would be very doubtful if it was constitutional, most people freely enter into their contract – it’s part of their property rights”.

She continued: “Under the Constitution, any interference by the State with those rights has to be necessary and proportionate but what we did do in the last number of months was move to allow people in the public sector to work until they are 70.”

Fianna Fáil

Fianna Fáil TD Willie O’Dea said that the party has “a number of proposals on pensions”, which will be set out in detail in his party’s manifesto, which is to be published “shortly”.

“If we’re elected to power, we will institute a review of pension age.

“We believe that the State pension should be the bedrock of provision for elderly people in retirement, but it has to be sustainable.”

Although his party leader Micheál Martin repeated the promise that a review would take place after an election, Martin also said that they would look to defer the pension age increase.

“We would defer that next year. In other words it would not take place next year until a full review of all of the issues around retirement was completed,” he said, according to the Irish Independent. 

O’Dea said that Fianna Fáil wants to be able to “look people in their 20s, 30s, or 40s in the eyes and say ‘When you reach 66, or whatever, there will be a pension there for you’”.

He said that he was “particularly exercised about people who have to retire at 65 or mid-60s because they’re doing heavy work” such as construction workers, or people in ill health. He also said that his party would “allow people to work beyond 65 if they wish”:

We’re going to outlaw these contracts which compel people to retire at 65.
At the very minimum there’s going to be no more signing on for people over 65; we’re going to make an administrative change there.
We, of course, are going to commit to pension [payment] increases over the next 5 years.

He said that to defer the changes in the pensions age due in 2021 and 2028 “would cost €470 million a year”, and “to reintroduce the transition pension would cost another €150 million”.

“That’s what I mean by sustainable,” he said referring to the massive costs associated with reversing the plan, and Ireland’s increasing elderly population.

Sinn Féin  

Sinn Féin is promising to bring the pension age back to 65.

The party spokesperson for Employment Affairs & Social Protection John Brady said that Fine Gael’s plan means that Ireland will have “a pension age that is well ahead of the majority of our EU counterparts”. 

“Our nearest neighbours England do not plan to move their pension age to 68 years until 2046, 18 years after Ireland,” Brady said.

Cheap promises from Mícheál Martin’s party ahead of an election to review the planned increase in the pension age means nothing for those who are already struggling.

A spokesperson said that it was Sinn Féin “who put this issue on the political agenda”, referencing a Sinn Féin Bill on the pension age that was due before the Dáil dissolved.

“At the moment, those obliged by contract to retire at 65 years are forced on to a Jobseekers Payment for one year before accessing their State Pension at 66 years. From next year, retirees will be forced on to a jobseekers payment for two years.

“This is a ridiculous and unacceptable situation for people who have worked hard and paid their taxes, in some cases, for a lifetime.”

Labour 

The Labour Party’s plan is to stop the age being increased beyond 66 if it gets into government.

Its manifesto says:

Many of those now reaching the age of 66 have already made 45 years of social insurance contributions, and many are affected by mandatory retirement at the age of 65.
We are living longer, and we do need to prepare for longer working lives, but we have a sufficient surplus in the National Insurance Fund that we can afford to delay the move to the retirement age to 67. 

Stopping the rise in the pension age to 67 in 2021 will cost around €220 million a year, and €1.1 billion over the next five years. The Social Insurance Fund had a surplus of close to €4 billion at the end of 2019, and will increase by a further €2 billion in 2020. 

Labour also supports “a ban on mandatory retirement ages in employment contracts”.

A spokesperson claimed that at its Party Conference in November, its leader Brendan Howlin was the first to call for the rise in pension age to be stopped (to 67 in 2021).

It was also Joan Burton, who was Minister for Social Protection in the 2011-2016 government that introduced legislation to increase the State pension age.

Social Democrats 

The Social Democrats said they support the “Stop67 pension age campaign”. The campaign is being spearheaded by trade union Siptu to stop the retirement age at 66. 

In its alternative Budget for 2019, the Social Democrats said that they would “fund an increase in all weekly pension and welfare payments to match the projected rate of inflation in 2019″.

Solidarity-PBP

People Before Profit TDs want to restore the pension age to 65, and want to start “a major people power” movement to restore “an established” retirement age.

The party also aims to increase the State pension to €260 a week, and make it mandatory for employers to set up a pension scheme for their workers and contribute to the fund.

In a statement, Solidarity-PBP said that claims of a pension timebomb “is a piece of jargon to stop people celebrating increased life expectancy”.

The statement points out that Ireland has the youngest population in Europe and a study by the Finnish Centre for Pensions indicating that Ireland ranks 8th out of 36 countries for the highest pension age.

The only reason why the pension age is being increased is to put an extra financial burden on workers. Each year’s increase in the pension age costs a worker €12,911 a year. So, next year, the Irish State will save €25,822 for every worker in the country. 

“This is a shocking robbery and must be stopped,” the statement said.

Other parties

The National Party is in favour of a universal State pension, and says that automatic pension enrollment represents “poor value for money”. 

TheJournal.ie has also asked other parties for their positions on this issue. In terms of parties that have held parliamentary representation in the 32nd Dáil, we are waiting for responses from the Green Party, and Aontú.

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