Group: Government should link pensions to income
TASC - the think tank for action on social change - has welcomed the increases in the old age pension announced in today’s Budget, but criticised the Government's failure to link increases to income in wider society.
Paula Clancy, Director of TASC, said: "Ireland has one of the highest rates of pensioner poverty in the EU and faces the challenge of an ageing population over the next two decades or so. The Government has an opportunity to prevent pensioner poverty in Ireland for present and future pensioners by linking the public pension system to median wage.
"While the pension increase is obviously to be welcomed, it is only bringing the pension system closer to what it should already have been."
In relation to pensioner poverty, Paula Clancy highlighted the fact that in 2004, 33% of those aged 65 and over were at risk of poverty.
"State spending on social security-based pensions is currently around 2.5% of GNP - the lowest in the EU. In addition, four-fifths of pensioners are dependent on flat-rate State pensions for most of their income - only one-third receive any income from a private pension scheme," Paula Clancy said.
Ms Clancy said if the objective of the State pension system is to eliminate poverty in retirement, as it should be, the pension rates should be increased again.
She added that consideration should be given to relating State pensions to median income rather than gross average industrial earnings.
PRSI payments in Ireland are low by international standards, according to the group.
Speaking on behalf of TASC, Jim Stewart argues: "that the announced increases in PRSI rates to the extent that they preserve the solvency of the Social Security Fund are necessary. Although the precise structure of these changes could be debated".
